Up to 300 Australian superannuation funds could be shut down if strict new standards being pushed by the industry regulator are imposed. APRA is pushing the Federal Government to introduce major regulatory reforms to the superannuation industry, including entry testing and a universal licensing regime applying to all 3,000 local participants.

CEO Graeme Thompson said about 150 “high risk” super funds are already under close scrutiny by the regulator, with double that number likely to struggle to pass new licensing tests if they were introduced.

“We think that there would be a significant number that would have difficulty meeting the sorts of tests that we think are reasonable,” Mr Thompson told the Nine Network’s Business Sunday program. “It depends exactly where we end up pitching the standards, and that will depend on Government decisions about some elements of a new standard.

“But at the moment there is something like 150 funds that we have rated ‘high risk’ and are on ‘close watch’ by our supervisory people.”

Mr Thompson said most of those funds, some of which are currently subject to enforcement action, are “relatively small”.

“I think most of the large funds are well managed and would meet the standards that we would reasonably impose,” he said. “Quite possibly we could see some two or three hundred funds that would have difficulty meeting the sorts of entry tests that we would impose.”

None of Australia’s 400 public offer funds – the only funds currently required to have licences – was likely to struggle to meet new entry standards, he said.

He also repeated an earlier warning against Australians taking out insurance policies with unauthorised foreign insurers. “Clearly, with increasing premiums in some lines of insurance business, there’s been some incentive for people to look for cheaper policies offshore.”