APRA seeks greater industry transparency in latest phase of the Superannuation Data Transformation

The Australian Prudential Regulation Authority (APRA) will seek deeper insights into the superannuation industry under the latest phase of its Superannuation Data Transformation. In a discussion paper released to industry, APRA proposes to strengthen its data collection in areas including trustee board governance and investment liquidity and valuations.

The multi-year data transformation project was launched in November 2019 to upgrade the breadth, depth and quality of APRA’s superannuation data collection. Under the first phase of the project, “Breadth”, APRA addressed the most urgent data gaps in its collection, leading to greater transparency of the choice product sector, insurance outcomes and how trustees are using members’ monies. 

As part of Phase 2 of the project, “Depth”, APRA plans to collect data needed to further support APRA’s supervision of the industry in areas including:

Trustee profile: APRA will seek enhanced data on the business model and structure of trustees, trustee boards and board committees to provide greater insights into the governance practices and effectiveness of superannuation trustees.

Superannuation fund profile: APRA will seek additional data to provide APRA with a more detailed understanding of product distribution arrangements between funds and intermediaries such as employer sponsors and promoters, as well as complex product features such as lifecycle strategies. 

Investments: APRA proposes to collect new and enhanced investments data, including data to inform assessments of investment governance and exposure to liquidity and valuation risk. This is in line with APRA’s strengthened Prudential Standard SPS 530 Investment Governance (SPS530) and Prudential Practice Guide SPG 530 Investment Governance (SPG 530).  

Indirect investment costs: APRA will seek data on total annual indirect investment costs associated with each investment manager. The proposal will address a key gap in APRA’s data on investment expenses.

Financial statements: APRA also proposes to collect trustees’ financial statements data.  The data will help APRA understand the flow of monies within superannuation trustees and the superannuation system, and support assessments of financial resilience. 

Deputy Chair Margaret Cole said: “Deeper and richer data from trustees will significantly enhance APRA’s ability to improve industry transparency, governance and practices, and ultimately lead to better outcomes for members.

“In developing these proposals, APRA has sought to minimise regulatory burden on industry by requesting data that trustees already hold. We have also worked closely with peer agencies with the goal of ‘collect once and share’ where feasible.

“We look forward to consulting with industry on the proposed collection,” Ms Cole said.

APRA will hold industry workshops to further refine the collection design prior to finalisation and will invite a sample of trustees to participate in a pilot study.

The discussion paper Superannuation Data Transformation Phase 2 is available on the APRA website: Phase 2 Depth.