APRA vows crackdown on super funds spending member nest-eggs on travel, entertainment and conferences

A Federal regulator is cracking down on super fund managers spending their members’ retirement savings on travel, entertainment and conferences.

The Australian Prudential Regulation Authority has written to big super fund managers saying it had “observed deficient practices and questionable spending in some areas”.

It warned this could be putting managers in breach of their legal duty to consider the best financial interest of fund members.

Speaking softly while wielding a big stick, APRA deputy chair Margaret Cole said her teams would target fund expenditure where “member benefit is not immediately evident or may not be reasonably justified”.

And she vowed to continue to work closely with the Australian Securities and Investments Commission “to share information and co-operate on matters of mutual interest”.

Ms Cole said APRA could use its powers to enforce rectification measures upon super managers “where warranted“ and then make those actions public “where it is appropriate to do so”.

“APRA’s intent is to focus on those items of expenditure where there is potential to improve practices and outcomes across the industry” she said.

Industry super funds spend big on advertising, sponsorships and promotions in what they say is a bid to attract and retain members and maintain crucial economies of scale.

The eight biggest industry funds reportedly spent almost $200 million on marketing and sponsorship in 2022-23.

APRA has promised to publish information about 2022-23 expenditure next week, while similar data about 2023-24 would be published early in calendar 2025.

Ms Cole said APRA was committed to increasing the amount of available data in a bid to improve transparency across the super industry.

She said the attention of APRA teams “would be informed by market intelligence and matters of public interest”.

While not going into detail, she said their attention would initially be focused on types of payments and payees where the benefit to fund member was not readily apparent.