APRA: Super industry over-reacts to warning
A senior Australian Prudential Regulation Authority (APRA) official has said the superannuation industry has over-reacted to a letter warning that recruitment advertising might breach the sole purpose test.
APRA's general manager, specialised institutions divisions, Stephen Glenfield told the Conference of Major Superannuation Funds (CMSF) in Hobart that he believed there had been an over-reaction to the regulator's letter.
Glenfield said that while advertising that was solely directed towards recruiting members in the new choice environment might be deemed to breach the sole purpose test, this would not necessarily be the case when the advertising fulfilled other, associated purposes.
He said those other associated purposes could include informing existing members of the benefits they were receiving or any new services that would be made available.
"Existing members of superannuation funds must get something for it to be justifiable under the sole purpose test," he said.
"And what we'd ask trustees to do is demonstrate what benefits existing members receive from such advertising."
Glenfield said he would have expected that trustees would have made an appropriate business case for approving such advertising.
"Because, ultimately, the trustees of a fund need to determine whether a campaign will benefit its members," he said.
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