Regulation Impact Statement – Australian Prudential Regulation Authority
On 20 September 2021, the Australian Prudential Regulation Authority (APRA) announced final reporting standards to address critical data gaps in the current reporting framework.
The current reporting framework only applies to MySuper products and does not cover Choice products which represent 45% of all assets. Data is not collected for all products and investment options, and there are gaps in data covering insurance arrangements, expenses and member demographics. Differences in investment performance, fees and costs, expenses and insurance premiums between funds can have a large outcome on a member’s long term benefits. Additional data is also needed to enable APRA to administer the Australian Government’s Your Future, Your Super performance test for superannuation products.
The preferred option was to adopt 10 new reporting standards that will collect data to fill these data gaps to be implemented over two years beginning from 2021. Data provided by Registrable Superannuation Entity (RSE) licensees under the new reporting standards will enable APRA to monitor and benchmark performance across Choice and MySuper products. The new reporting standards will improve data accuracy, improve comparability of fund performance, and highlight areas for future supervision where RSE licensees may not be acting in members’ best financial interests.
APRA prepared and certified a Regulation Impact Statement (RIS), which the Office of Best Practice Regulation (OBPR) assessed as good practice.
The RIS estimates the average annual regulatory costs at $52 million.