APRA chairman Wayne Byres appeared before the House of Representatives Standing Committee on Economics on Friday.
Mr Byres’ opening statement to the committee was primarily concerned with big bank lending standards and stress testing – along with the well-documented problems in the life insurance industry.
But he also turned his attention to the superannuation sector, which Mr Byres noted has grown by just under 10 per cent over the year.
“Over that period, APRA has continued its focus on the implementation of the new prudential standards, and particularly how the industry is strengthening its governance and risk management frameworks and practices,” Mr Byres said.
“The majority of the industry is progressing reasonably well with this task, although the outcomes of our thematic reviews on conflicts of interest management and insurance risk management suggest that further work is needed in a range of areas to meet the heightened expectations set by the prudential standards,” he said.
“We will be releasing our findings from these thematic reviews in the coming months,” Mr Byres said.
APRA will assess the superannuation industry’s progress on investment governance over the coming year, he said.
“We will also seek information from trustees on how they are meeting their legislative obligation to assess whether members in their MySuper product are disadvantaged relative to those in other MySuper products – often referred to as the ‘scale test’,” Mr Byres said.
“This is an important aspect of the new superannuation framework that is intended to drive enhanced competition and efficiency in the industry, and hence better outcomes for members,” he said.
“We expect trustees to take a robust, rigorous and wide-ranging approach to this assessment,” Mr Byres said.
