Super funds that fail to produce "concrete evidence" they are delivering for members could soon be compelled to merge, says APRA deputy chair Helen Rowell.
APRA deputy chair Helen Rowell has accused the super industry of being "reactive rather than proactive" when it comes to appraising its scale and considering mergers.
Ms Rowell appeared on a panel discussion titled 'Tectonic shifts in superannuation' at the Financial Services Council Leaders Summit in Sydney yesterday.
The panel discussion focused on the government's draft legislation proposing increased APRA powers to enforce the so-called 'scale test' (soon to become an 'outcomes test') as well as the regulator's criticism of super fund business planning in its Insights publication this week.
Ms Rowell said super funds must begin thinking of themselves as financial services businesses with a proactive business plan.
"We have that aggressive focus on strategic business planning because that's the starting point," she said.
"You need to have clear objectives, clear goals, a clear path forward and monitor progress along that if you're going to be successful as a business and respond to theses external changes," Ms Rowell said.
The APRA deputy said she had "no doubt" that the directors of super funds genuinely believed they were acting in the best interests of their members.
"The question is, how are they making that judgement, and are they doing enough to actually really understand what their members want?" she asked.
"And that's where we see the gap ... but we're not seeing the concrete evidence of how trustees are turning their minds to that and translating that into an objective assessment, Ms Rowell said.
Some funds may discover they are not delivering good outcomes to their members, said Ms Rowell – in which case they will have to "change their strategy or exit [by merging]".
"We expect trustees to look at those benchmarks [in the Insights report] and come up with it themselves," she said.
"We would much rather individual funds form their own conclusions about the way forward and took action to achieve rather than waiting to be pushed by us," Ms Rowell said.