| No. |
Member |
Question |
Hansard page
and Hearing date or
Written questions |
Response
(Publication date)
|
APRA01QW
|
Leigh |
Given the significant impact on member accounts of margins built into fees which go beyond cost recovery in order to generate profits, and the expenditure this represents for ‘for profit’ funds:
(a) does APRA monitor the profits retail super funds distribute to their owners and shareholders, and the payments made by funds to related entities (ie. entities which hold equity in, or are associated in some way with, the fund or its parent owner/shareholders) for particular services?
(b) If ‘no’, why not? Has that been considered as an important measure of prudential conduct and performance benchmarking?
(c) If yes, how much revenue did Australian ‘for profit’ super funds generate overall for owners and shareholders over each of the last five years?
(d) What have been the payments made by funds to related entities?
|
Written |
(28 May 2021)
(PDF51KB) |
APRA02QW
|
Leigh
|
A letter from APRA’s Deputy Chair Rowell and ASIC’s Commissioner Press to RSE licensees (dated 15 December 2020) notes:
Both the Member Outcome obligations and the design and distribution obligations require RSE licensees to make business decisions based on the outcomes they are seeking to achieve for their members who hold the product.
(a) What standards will APRA apply to reassure itself that ‘for profit’ funds are not feeding out profits beyond the level that would deliver optimal member outcomes?
(b) By APRA’s calculation, what is that level?
(c) Given that the obligations set out in the 15 December letter require RSE’s to use both internal and external data to ensure member outcomes and design and delivery outcomes are defensible, how far above average sector performance would a retail fund’s member returns need to be in order to justify a decision to distribute funds to owners or shareholders?
|
Written
|
(28 May 2021)
(PDF48KB)
|
APRA03QW
|
Leigh
|
Deputy Chair Helen Rowell noted in media comments that APRA’s current review process “will consider the framework and decision-making process of boards pertaining to certain areas of expenditure, including a review of the metrics and approach to assessment of benefits to members".
(a) Does APRA consider strategies around the generation of profit (other than that which accrues to member accounts) to be an area of expenditure?
(b) Will APRA be requiring RSEs to justify their strategies not just in the context of their own business models, but in relation to the business models of alternative funds that would provide their members with equivalent or better outcomes?
|
Written
|
(28 May 2021)
(PDF56KB)
|
| APRA04QW |
Falinski |
In regards to the response provided by HESTA to HEST129QW; can APRA please provide the Committee with how much industry superannuation funds provide in funding to the Industry Superannuation Association.
|
Written
|
(28 May 2021)
(PDF117KB)
|
| APRA05QON |
Leigh |
Dr LEIGH: It wouldn't fill people who were worried about irresponsible lending with a great sense of hope. Let me move on to a couple of issues which have been floating around recently. Has APRA provided advice to the government on the proposal for early release of superannuation to victims of family violence?
Mrs Rowell: No, we haven't.
Dr LEIGH: Did any informal conversations take place around that proposal?
Mrs Rowell: Not that I'm aware of.
Dr LEIGH: Has APRA formed a view on whether that would be good policy?
Mrs Rowell: That's a matter for government.
Dr LEIGH: What about the proposal to allow early release of superannuation for house purchases? Has APRA provided any advice to government on that issue?
Mrs Rowell: Again, not that I'm aware.
Mr Byres: Nor am I.
Dr LEIGH: Have any informal conversations taken place over that issue?
Mrs Rowell: Not that I'm aware of.
Mr Byres: Nor am I.
Dr LEIGH: You're answering all of these questions in terms of what you're aware of. I ask you to check the records after the hearing and, if you become aware of such documents, to forward those to the committee.
Mr Byres: We're happy to go and confirm whether any conversations have taken place. As I said, we're only speaking in an abundance of caution, not wishing to mislead anyone.
Dr LEIGH: Yes, I understand. I just want to make sure that we're getting the fullest picture that we can.
Mr Byres: We'll take that on notice and get back to you.
Dr LEIGH: Yes. To the extent that advice has been provided on either of those issues, I'd be grateful if that advice could be shared with the committee, please.
|
Hansard p. 8
29 March 2021
|
(28 May 2021)
(PDF125KB) |
| APRA06QON |
Falinski |
Mr FALINSKI: The sole purpose test is designed to ensure that these institutions, which Australians are forced to put their money into—they don't get a choice; it's not Woolworths and Coles—act to the benefit of members. Can you tell me how much money industry funds give to Industry Super Holdings and the industry super association?
Mrs Rowell: We'd need to take that on notice.
|
Hansard p. 12
29 March 2021
|
(28 May 2021)
(PDF146KB) |
APRA07QON
|
Falinski
|
Mr FALINSKI: If you fine AMP or a retail super fund, their shareholders pay for it. Talk me through the case of First State Super, which is now Aware Super, when they had a situation where they were fined for financial advice that they were providing. Who paid those fines? Was it paid by the members or by the shareholders?
Mrs Rowell: I believe in that case it came out of reserves in StatePlus, which is not a superannuation entity.
Mr FALINSKI: You believe that, or that is the case?
Mrs Rowell: I'm fairly—
Mr FALINSKI: My understanding is—sorry.
Mrs Rowell: I'm fairly certain that's the case, but we can confirm that on notice.
|
Hansard p. 13
29 March 2021
|
(28 May 2021)
(PDF126KB)
|
| APRA08QON |
Mulino |
Dr MULINO: I have just a couple of additional questions, actually, on super, and they relate to early release. My understanding is that under the early release scheme around 3½ million people withdrew a bit over $36 billion and that something in the order of 700,000 people have reduced their account balances to zero or thereabouts. I'm wondering if you could—and this is something that you'll probably have to take on notice—please provide a breakdown of those who accessed that scheme by age, gender, state, the average withdrawal amount and the median balance.
Mrs Rowell: I'm not sure that we'll be able to provide all of that information. We will do our best. For example, I'm not sure that we have data state-by-state, but we will look at what breakdown we are able to provide. I would also say that, in relation to the total number that have drawn down to zero—it may be a definitional issue—my recollection is that the number we have is more like 300. We can confirm that as well, if that would be helpful.
Dr MULINO: That would be helpful, thanks.
|
Hansard pp. 15-16
29 March 2021
|
(28 May 2021)
(PDF219KB) |
| APRA09QON |
Mulino |
Dr MULINO: On notice, I'd be interested in not just the high-level data but more rigorous analysis to get a detailed sense of how this issue is getting worse or potentially not in different parts of the market in both health and life.
Mr Byres: We'll have a look at what we can provide.
|
Hansard p. 18
29 March 2021
|
(28 May 2021)
(PDF186KB) |
| APRA10QON |
Falinski |
Mr FALINSKI: I need to go reasonably quickly so I apologise. In my previous questions I asked about industry super funds paying fines out of their members' funds. I've been told that REST and First State, which has now become Aware Super, are the only two public examples of industry super remediation and that's because not everyone has to report. Is it correct that they don't have to disclose that publicly? Is that correct? Or would you like to take that on notice?
Mrs Rowell: I will take that on notice.
|
Hansard p. 18
29 March 2021
|
(28 May 2021)
(PDF124KB) |
APRA11QON
|
Falinski
|
Mr FALINSKI: I'm also told that, potentially, there may have been some misunderstanding. StatePlus, which you said had paid the fines, is actually wholly owned by First State, now Aware Super. So, in effect, it was all out of members funds anyway because the trustee didn't actually pay that fine. Would you like to take that on notice as well?
Mrs Rowell: Yes.
|
Hansard p. 18
29 March 2021
|
(28 May 2021)
(PDF120KB)
|
APRA12QON
|
Falinski
|
Mr FALINSKI: Can I ask you to take this on notice? I want to see examples from you of where you have taken notice of that consultation and changed something so that that competition was actually enhanced and barriers were reduced, because we keep hearing from regulators over and over again that they are consulting with the sector, but consulting doesn't mean that you've changed anything.
Mr Byres: We will take that on notice, Mr Falinski. I actually gave a speech on this issue a while ago, so I'll start with that.
Mr FALINSKI: Send me your speech. If you've got a YouTube link, that would be even better.
Mr Byres: I'll send you the speech, and then we'll send you any other examples that have happened since then, but there's quite a list.
|
Hansard p. 19
29 March 2021
|
(28 May 2021)
(PDF163KB)
|
APRA13QON
|
Leigh |
Mrs Smith: All of the information we use to calculate the performance test is available to those entities themselves. So the information won't be a surprise to them; most of them have worked through a lot of that information to get a good sense of where they were going to land. Whilst they don't have the final number, they would have a good understanding of the basis and the reasons for the outcome they received.
Dr LEIGH: Will you provide to this committee the underlying scores of those who failed the performance test?
Mrs Smith: We'll take that on notice.
Dr LEIGH: I'd also be keen to get the data for the 10 funds which were closest to failing the performance test.
Mrs Smith: We'll take that on notice as well.
Dr LEIGH: In terms of the chats that you had with funds in the lead-up, there were certainly some funds which seemed to be performing quite badly on the heat map but then didn't fail the performance test. Can you provide a list of funds that resubmitted data to APRA in the month before the performance test was released?
Ms Cole: We'll take that on notice.
|
Hansard p. 12
10 September 2021
|
(22 October 2021)
(PDF98KB)
|
APRA14QON
|
Leigh |
Dr LEIGH: Were there many funds that changed their position to a material extent between the heat map and the performance test? I'm thinking of MLC, Commonwealth and [inaudible]. These are funds which you would have thought were sure to fail the performance test but didn't.
Ms Cole: The first point to make is that there were different parameters for the performance test. If you'd like more detail, we could provide that to you now or later. It was clearly the case that funds were going to look carefully at data submissions in the light of the test and the importance of the outcome of the test. There were re-submissions. We considered every one that came in, and tested them. We made sure that the governance around the resubmissions was correct and that the boards had considered the request for a resubmission. In fact, the law didn't allow us to turn down resubmissions, but we did go through some process around that. We felt it was very important for [inaudible] to be able to put in accurate data and it wasn't inappropriate for them to look back at it. Typically, they were looking at whether they had correctly categorised data in the past against the various different categories that have become clearer, or more clearly classified, in the performance test parameters. So, yes, there were resubmissions. We looked at them carefully. We felt that it was appropriate that we should run the test on accurate data. I'm sure Suzanne could add more detail if you'd like it now.
Dr LEIGH: It's a list I'd be keen to get.
Mrs Smith: We'll take that on notice.
|
Hansard p. 12
10 September 2021
|
(22 October 2021)
(PDF155KB)
|
APRA15QON
|
Hammond |
Ms HAMMOND: Given that you are just putting in place remuneration practices which are going to make a whole lot of other things public, for that whole accountability reason, is there a reason why whistleblowing practices or whistleblowing examples are not made public?
Mr Lonsdale: It often depends on the whistleblower themselves, so some whistleblowers will want anonymity. Clearly there is a reason there why they may not. So for others, typically they will come through the bank itself and we will have a look at those. If you would like more information on that we're very happy to come back to you.
Ms HAMMOND: Thank you. Yes, that would be great.
|
Hansard p. 14
10 September 2021
|
(22 October 2021)
(PDF154KB)
|
APRA16QON
|
Hammond |
Ms HAMMOND: Do you have a similar agreement or relationship with either AUSTRAC or the ACCC?
Mr Byres: Yes. We have MOUs with many agencies, including the two that you talked about. We can provide you with a list of those agencies. They're publicly available on our website. The ways in which we engage differ. The structures might be different. But we've got good relationships with both of those agencies that you talked about.
|
Hansard pp. 14-15
10 September 2021
|
(22 October 2021)
(PDF121KB)
|
APRA17QON
|
Murphy |
Ms MURPHY: Thank you. I noticed when I was reading through the information paper that it talked about a number of global actions that have focused attention on the financial risk of climate change: the Paris Agreement and recommendations of the Task Force on Climate-related Financial Disclosures. The third one was senior legal opinion on the potential liability of company directors in Australia, where risks associated with climate change are not adequately managed. What are you referring to in respect of that senior legal opinion?
Mr Byres: There has been some legal opinion published by senior counsel that talks to the potential liability to directors if they do not appropriately consider the risks to their business from climate change, so we said that is one factor at play. As well as that are the other factors, institutional investors, government policy changes et cetera, and they mean we really wanted to raise the awareness of this issue.
Ms MURPHY: Do you have the detail of that legal opinion: who it came from, who asked for it and where it was published?
Mr Byres: Yes, we can provide that to you.
|
Hansard p. 15
10 September 2021
|
(22 October 2021)
(PDF125KB)
|
APRA18QON
|
Mulino |
Dr MULINO: Do you have indicative measures of likely coverage in terms of funds under management and products?
Mrs Smith: Perhaps I can take that one. We were starting with the choice heat map to cover what we're calling our premixed product—the products that are similar to the MySuper products, those that have a mixture of asset classes in them. I'll take on notice what proportion that covers, but it's largely aligned to where the government will be going with the second part of the performance test, which is for trustee directed products. But it's a large portion of the market, and we've chosen to take that approach because it captures a very large proportion of members that are in choice products.
|
Hansard p. 18
10 September 2021
|
(13 December 2021)
(PDF130KB) |
APRA19QON
|
Mulino |
Dr MULINO: There's obviously a range of ways in which different stakeholders are interacting with the various mechanisms we're seeing now. If funds underperform, they're going to receive a letter. We have this website, which we don't imagine millions of members are logging on to and going through in detail. Have you done much analysis with the MySuper heat map as to who's using the website and how accessible it is?
Mrs Smith: We'll take that on notice. The MySuper heat map wasn't designed as a consumer tool, but the reality is that consumers will look at it because it's there. It's on our website, so it is available to be looked at. The ATO's YourSuper comparison tool has been designed with the consumer in mind. It has data set out in a more simple format and it directs consumers to where they can get more information. I think it's fair to say that we want to try to make it as simple as possible, so, where there is a range of information in the market which we can align with, we will. In terms of the points of access and who's been doing the heat map, we can take that on notice to give you a sense of the volume of activity there. I don't know that we'll actually know who's going on. We can give you information more on how it's being accessed.
|
Hansard p. 19
10 September 2021
|
(22 October 2021)
(PDF163KB)
|
APRA20QW
|
Wilson |
a. How did APRA define the sole purpose test?
b. How does APRA define the best financial interest test?
c. How is APRA defining the difference between the ‘sole purpose test’ and the ‘best financial interest’ test?
d. What action has APRA taken since the introduction of the ‘best financial interest’ test that was not possible under its definition of ‘sole purpose test’?
|
Written |
(22 October 2021)
(PDF167KB)
|
APRA21QW
|
Wilson |
Throughout the AFL Grand Final advertisements were run by CBUS at considerable cost, therefore:
a. has APRA investigated the cost of this advertising and whether it amounts to the best financial interests of members
b. if so how did it establish it was, or it was not?
c. And if is not, what action has APRA taken?
d. And if APRA has not investigated, will it?
e. If not, why not?
f. And if it is under investigation, when will the investigation be complete?
g. And will APRA provide an additional report to the committee once it is complete?
h. And if not, why not?
|
Written |
(22 October 2021)
(PDF144KB)
|
APRA22QW
|
Wilson |
Other superannuation funds have been running considerable advertisements on television, radio and billboards, therefore:
a. has APRA investigated the cost of this advertising and whether it amounts to the best financial interests of members
b. if so how did it establish it was, or it was not?
c. And if is not, what action has APRA taken?
d. And if APRA has not investigated, will it?
e. If not, why not?
f. And if it is under investigation, when will the investigation be complete?
g. And will APRA provide an additional report to the committee once it is complete?
h. And if not, why not?
|
Written |
(22 October 2021)
(PDF135KB)
|
APRA23QW
|
Wilson |
Industry Super Australia has been running considerable advertisements on television, radio and billboards, therefore:
a. has APRA investigated the cost of this advertising and whether it amounts to the best financial interests of members
b. if so how did it establish it was, or it was not?
c. And if is not, what action has APRA taken?
d. And if APRA has not investigated, will it?
e. If not, why not?
f. And if so, what is the progress of your investigation?
g. And if it is under investigation, when will the investigation be complete?
h. And will APRA provide an additional report to the committee once it is complete?
i. And if not, why not?
|
Written |
(22 October 2021)
(PDF135KB)
|