What happens if my super fund doesn't follow APRA's directions?

In Plain English

If your super fund, specifically the RSE licensee (the company that holds the license to operate the fund), doesn't comply with directions issued by APRA (the Australian Prudential Regulation Authority), there can be serious consequences. APRA has the power to enforce compliance. If the RSE licensee fails to follow APRA's directions, APRA can take action, including revoking the fund's license to operate. Additionally, the RSE licensee may face penalties, such as fines of up to 100 penalty units for each day the direction is breached, as stated in Superannuation Industry (Supervision) Act 1993.

Detailed Explanation

If an RSE licensee fails to comply with a direction issued by APRA, the following can occur:

1. License Cancellation: APRA has the power to cancel a license to operate an APRA-regulated superannuation fund under section 29G of the Superannuation Industry (Supervision) Act 1993. Several documents mention this power of APRA, including Superannuation (prudential standard) determination No. 4 of 2024, Superannuation (prudential standard) determination No. 2 of 2024 and Superannuation (prudential standard) determination No. 3 of 2024.
2. Penalties: Under section 131DD of the Superannuation Industry (Supervision) Act 1993, an RSE licensee that breaches a direction from APRA may face a penalty of 100 penalty units for each day the breach continues. This is mentioned in Superannuation (prudential standard) determination No. 4 of 2024, Superannuation (prudential standard) determination No. 2 of 2024 and Superannuation (prudential standard) determination No. 3 of 2024.

It's important to note that APRA's decisions to issue directions are subject to merits review, as stated in Superannuation (prudential standard) determination No. 4 of 2024, Superannuation (prudential standard) determination No. 2 of 2024 and Superannuation (prudential standard) determination No. 3 of 2024.