APRA has released the latest edition of its Insight publication (Issue 2, 2009).8

In providing its overview of the superannuation industry, APRA noted the following:

  • Sixty-one corporate funds were wound up during the year. APRA expects this trend to continue given the optional capital gains tax rollover relief for capital gains losses resulting from a complying superannuation fund’s merger (which was first announced in December 2008).
  • A number of trustees had applied for and been granted relief by APRA from portability requirements under regulation 6.37 of the SIS regulations. APRA believes that it is appropriate to continue to manage this issue on a case-by-case basis.
  • Valuation of unlisted assets remains ‘contentious’. APRA has been providing guidance on this issue and is continuing to monitor trustee compliance.9
  • APRA’s recent review of defined benefit funds revealed that 15.9 per cent of defined benefit funds and 19.7 per cent of defined benefit/hybrid sub-funds were in an unsatisfactory financial position as at 30 June 2008. APRA continues to focus on this issue and states that it is ‘gratifying to note that these matters are receiving close attention from the industry and the professions’.
  • APRA commenced a review of administrators in 2008 and a review of custodians in 2009.
  • APRA reports an 83 per cent fall in the number of breach reports lodged with APRA, following the introduction of the ‘significance’ test.
  • APRA has used the information obtained in its recent liquidity questionnaire to enhance its supervision of the superannuation industry.

This edition also contains an editorial which provides ‘an overview of the superannuation industry from 2007 to the end of 2008 in the context of the global financial crisis and negative returns for the industry’.