2008年-世界发展银行全球_Risk-Based_Supervision_of_Pension_Funds_in_Australia_38页_227kb

Summary of Risk-Based Supervision of Pension Funds in Australia

Core Content

This paper explores the development and implementation of risk-based supervision of pension funds in Australia, highlighting the evolution from a basic regulatory approach to a more sophisticated and integrated system. The Australian Prudential Regulation Authority (APRA) plays a central role in this framework, which has been shaped by organizational changes, resource constraints, fund failures, and concerns over industry weaknesses.

Main Viewpoints

1. Risk-Based Supervision Overview

• Risk-based supervision of pension funds in Australia began in the early 1990s with the introduction of the Superannuation Guarantee (SG) in 1992.
• The approach focuses on identifying high-risk funds and allocating supervisory attention accordingly.
• A more sophisticated risk-rating model, PAIRS/SOARS, was introduced in 1992 to provide a disciplined and consistent methodology for risk assessment.

2. Drivers for Change

• Organizational change: The creation of APRA in 1998 as part of the Financial System Inquiry (Wallis committee) allowed for a more integrated approach to supervision, drawing on techniques used in banking and insurance.
• Resource constraints: The regulator needed to better use its limited supervisory resources.
• Fund failures: Several pension fund failures in the early 2000s, particularly involving small funds, prompted a shift toward more proactive supervision.
• Framework weaknesses: Concerns over inadequate compliance with conduct rules and poor governance, especially among smaller funds, led to calls for improved oversight.

3. Regulatory Enhancements

• Between 2004 and 2006, regulatory techniques such as universal licensing, 'fit and proper' assessments, and risk management requirements were adopted for the pension sector.
• PAIRS/SOARS model was introduced to assess and monitor risk systematically.
• The model includes:
  • PAIRS: A risk rating system that evaluates the likelihood of fund failure.
  • SOARS: A supervisory stance that determines the level of supervision required based on risk ratings.
• The framework allows for a more targeted and efficient allocation of supervisory resources.

4. Supervisory Approach

• Strategic framework: APRA uses a structured approach to assess the riskiness of pension funds and map this to supervisory actions.
• Licensing and registration: All funds must be licensed, with different requirements for different fund types.
• Risk management standards: Funds are required to have robust risk management systems.
• Outsourcing: External administrators, investment managers, and custodians are common, and APRA has developed standards to manage associated risks.
• Trustee resources: Trustee boards must have adequate resources to fulfill their responsibilities.
• Net tangible assets: Minimum capital requirements are set to absorb operational losses.
• Auditors: External auditors play a key role in monitoring compliance and financial health.

Key Information

5. Structure of the Superannuation Industry

• Australia's pension system is structured around three pillars:
  1. Government-funded pension: A means-tested indexed pension, currently providing retirement income to approximately 54% of individuals of qualifying age.
  2. Superannuation Guarantee (SG): Employers are required to contribute a percentage of employees' wages to superannuation funds. The SG rate increased from 4% in 1992 to 9% in 2002.
  3. Voluntary private savings: Encouraged through taxation concessions, this pillar has seen significant growth in self-managed superannuation funds.

6. Fund Types and Size

• Retail funds (32% of assets): Open to the public, often associated with insurance companies or banks.
• Industry funds (16% of assets): Linked to specific industries and trade unions.
• Corporate funds (7% of assets): Established by individual employers.
• Public sector funds (17% of assets): Managed by central and state governments.
• Small funds (23% of assets): Funds with fewer than five members, not subject to prudential regulation.

7. Asset Allocation

• Superannuation funds have shifted from domestic fixed interest to equities and overseas investments.
• In 2005, the asset allocation included:
  • Australian equities: 33%
  • International equities: 23%
  • Australian fixed interest: 13%
  • International fixed interest: 5%
  • Property: 8%
  • Cash: 7%
  • Other: 10%

8. Supervisory Impact

• The PAIRS/SOARS model has improved the analytical discipline of risk assessment.
• It strengthens the link between risk assessment and supervisory response.
• It allows for better targeting of supervisory resources, particularly for high-risk funds.
• The model includes:
  • Calculation of PAIRS ratings: Based on balance sheet, investment, operational, and governance risks.
  • Supervisory stance (SOARS): Defines the level of supervision based on risk ratings.
  • Guidance for analysts: Provides detailed criteria for evaluating risk.

9. Effectiveness Evaluation

• The model has been effective in improving the oversight of pension funds.
• It has enabled regulators to focus on areas of higher risk.
• It has contributed to a safer and more sound financial system by encouraging better risk management practices among funds.

Conclusion

The Australian approach to risk-based supervision of pension funds is a comprehensive and evolving system that has adapted to the changing landscape of the superannuation industry. It emphasizes the importance of risk management, provides a structured methodology for assessing risk, and ensures that supervisory resources are allocated efficiently. The system applies to both defined contribution and defined benefit funds and has been influenced by organizational changes, resource limitations, fund failures, and regulatory concerns about governance and compliance.