Despite these efforts, APRA's Executive Director, Carmen Beverley-Smith, has conveyed to fund executives that substantial improvement opportunities remain. "The management of funds, the governance of investments and expenditures, liquidity strategies, performance tracking, and understanding member needs directly influence the retirees' financial outcomes," she remarked. "Significant enhancements are still possible across these domains."
During her address at the ASFA conference, Beverley-Smith underscored APRA's keen focus on trustees' investment governance approaches and their compliance with the updated requirements that were implemented in January of last year. Her insights illuminate the ongoing challenges faced by the industry.
An APRA-led survey from last November exposed persisting issues in valuing unlisted assets. The survey revealed that some trustees lacked definitive triggers for revaluations. Additionally, valuations for certain unlisted assets, such as private equity, credit, property, and infrastructure, were not conducted quarterly, contrary to APRA's guidelines.
The agency is finalizing an evaluative review of asset valuation and liquidity management practices across a diverse array of trustees who hold substantial unlisted asset portfolios. "This deep dive aims to offer profound insights into asset valuation and liquidity management," Beverley-Smith noted. "We anticipate sharing our findings shortly."
Beyond asset valuation scrutiny, Beverley-Smith discussed APRA's evaluation of trustee expenditures in super funds. She emphasized that funds must justify their expenses as genuinely serving the best financial interests of their members. "It's crucial to pinpoint member advantages and develop metrics to evaluate outcomes," she advised.
The findings and recommendations from APRA's analysis are eagerly awaited by financial service professionals, as they hold profound implications for how superannuation funds handle unlisted assets. This scrutiny aligns with a broader movement for greater transparency and accountability in the financial management of retirement savings.
The original article sourced from Financial Services News underlines the pivotal role APRA plays in steering the superannuation industry toward greater financial prudence and member-focused practices. As APRA initiatives unfold, the focus on fiduciary responsibility and improved governance is expected to be paramount.
