Super Funds Under Scrutiny: APRA Cracks Down on Travel and Entertainment Spending

Australia's superannuation industry is facing increased scrutiny after a financial analysis revealed significant spending on travel, entertainment, and other non-core activities. The Australian Prudential Regulation Authority (APRA) has vowed to take action, warning super fund managers to rein in their discretionary expenses and prioritise member benefits.

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Major Spending Revealed in 2022-23 Financial Year

APRA’s analysis of the 2022-23 financial year has raised concerns about how some of the nation’s largest super funds are using members' savings. Key findings include:

• $200 million was spent on marketing and sponsorship by the eight largest super funds.
• $8 million in payments to unions.
• Additional funds allocated for conferences, travel, and entertainment—all areas APRA now plans to monitor more closely.

This spending has sparked debate about the balance between business development and the ethical stewardship of members’ nest eggs.

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APRA’s Message: “Members Come First”

APRA has responded by signalling a crackdown on super funds using members’ savings for expenses not directly related to financial returns. The regulator emphasised that funds must demonstrate value for money in all activities.

"We are committed to ensuring that every dollar spent by super funds is justifiable and in the best interests of members," an APRA spokesperson stated. "Unnecessary spending on travel, entertainment, or events will no longer be tolerated."

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Why the Spending Is Raising Concerns

Super funds are responsible for managing trillions of dollars on behalf of Australian workers, making their financial decisions critical for members' retirement outcomes. Critics argue that lavish spending on sponsorships or travel undermines the principle of maximising returns for members.

This is especially problematic at a time when Australians are becoming increasingly focused on fees and fund performance, with many switching between funds to find better value.

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Super Funds Defend Their Spending

Some super funds have defended their marketing investments, claiming that sponsorships and events help build brand awareness and attract new members, ultimately contributing to long-term growth. Payments to unions, they argue, are legitimate under industrial agreements that support workplace benefits.

However, APRA’s warning suggests that funds will need to justify such spending under stricter regulatory guidelines going forward.

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What This Means for Super Fund Members

For Australians with super accounts, this development is an important reminder to stay informed about how their fund operates. As APRA tightens the rules, members should:

1. Monitor fund performance and fees to ensure their savings are being managed efficiently.
2. Review their fund’s annual reports for transparency on how funds are spent.
3. Consider switching funds if they feel their current provider is not acting in their best interests.

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Conclusion

Tired of superfunds taking advantage of your retirement nest egg?

Get in touch with the team at Supavest to discuss how you can take charge of your retirement! 

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