The Australian Prudential Regulation Authority (APRA) has told a Parliamentary Committee that it will not be immediately intervening in industry fund Cbus in response to evidence put before the Royal Commission but will, rather, allow the fund’s own investigation processes to run their course.
On the 11 December 2014 , under robust questioning before the House of Representatives Economic Committee, APRA member, Helen Rowell said that the regulator was conducting its regular discussions with Cbus but would be awaiting the findings of Royal Commission before moving further.
Liberal parliamentarian and former ministerial adviser, Dr Peter Hendy had asked Rowell why, when APRA was the regulatory supervisor of superannuation funds, it had taken a Royal commission to uncover the issues which existed with respect to Cbus and the Construction Forestry Mining and Energy Union (CFMEU).
Rowell responded that:
“APRA’s role as the prudential regulator is to focus on the governance, risk management and controls at a high level”.
“We do not necessarily look into individual relationships and arrangements.”
However the Superannuation Safety Amendment Act 2004 gave increased enforcement powers to APRA by giving APRA the power to licence Trustees and to register funds.
Extensive conditions are imposed on the RSE Licence issued by APRA to trustees. APRA has the power to suspend or revoke the RSE Licence in the event of misconduct by trustees.
On the question of what APRA was now doing with respect to Cbus, Rowell said:
“Some of the findings of the royal commission are still to emerge. When that occurs, we will clearly have another look and decide what further action, if any, needs to be taken.” “At the moment, our regular discussions with Cbus about what we are doing to address this are continuing. We are seeking to ensure that the steps they are undertaking themselves to review the frameworks and processes they have in place, and to identify what the issues are and how best to mitigate them going forward, will be dealt with.”
“They have announced publicly that an independent investigation into the governance and issues around the disclosure is going to be undertaken by Graham Samuel and someone else. We are seeking to satisfy ourselves that the scope and nature of that investigation will be sufficiently comprehensive, Until that is completed, I think we need to let that process take its course. At this stage our view is that Cbus is being responsive and taking action to address the particular concerns.”