APRA flags targeted assessments of super | Australian Markets

The Australian Prudential Regulation Authority (APRA) has again positioned superannuation funds on discover that it’s going to proceed to deal with their expenditure, together with by way of targeted assessments.

The regulator has made its intentions clear in its 2025/26 company plan beneath the heading of “Intensified supervision of expenditure” noting that “fund-level expenditure will remain a key focus to ensure trustees act in the best financial interests of members”.

“Over the next 12 months, APRA will undertake targeted assessments of expenditure data, and where deficiencies are identified, trustees will be required to make improvements,” it mentioned.

The regulator additionally specified that it will be taking a targeted review of platform merchandise stating that it’s at the moment endeavor a review to “assess the standard and soundness of trustees’ governance and oversight of investment supplied by way of platforms.

“The review focuses on key areas including due diligence, onboarding, monitoring, and removal of investment options, as well as strategic planning and practices to promote member outcomes,” it mentioned.

“APRA will assess current practices against relevant prudential standards,” it mentioned. “APRA’s findings will be shared with the superannuation industry, highlighting areas where enhancements are expected.”

Looking broadly at superannuation, APRA’s company plan mentioned the worth of property managed by the superannuation sector had doubled previously decade to $4.1 trillion, representing round 150% of GDP.

“Australia’s superannuation system is a massive and growing part of the financial system – managing the long-term financial savings of members during their working lives, delivering income for retirees and enjoying an important position in funding financial exercise by way of its impression on capital allocation.

“However, the superannuation industry faces growing challenges over coming years. Similar to the banking industry, risks are becoming more complex – continued strengthening of superannuation funds’ governance and operational risk management practices is therefore an area of ongoing regulatory focus. The growth of the sector has also made it more interconnected with other parts of the financial system, which could introduce potential vulnerabilities,” the plan mentioned.

“An ageing population presents new challenges to the superannuation industry as more of its members move to the retirement phase. The Government’s Retirement Income Review found that a high proportion of superannuation benefits remain unspent over the retirement phase, which may lead to a lower living standard in retirement than could otherwise have been achieved.  Improving outcomes for members in retirement remains an area of ongoing regulatory focus.”