PC claims misrepresentation

22 November 2018
| By Mike |
image
image
expand image

The Productivity Commission (PC) has claimed that its approach to superannuation investment performance has been misrepresented by some sections of the media and commentators.

Importantly, the PC has also dismissed a narrow focus on past performance.

Responding to a letter of concern from MTAA Super chief executive, Leeanne Turner, PC deputy chair, Karen Chester together with commissioner, Angela MacRae responded with a letter stating that the PC had acknowledged the importance of taking account of risk when comparing the investment performance of superannuation funds and products.

The PC letter said it had also acknowledged that volatility in investment returns was particularly important for some members that were close to retirement.

“Our investment performance assessment informs our system-level assessment of the competitiveness and efficiency of the superannuation system,” it said. “This is distinct from the selection criteria to inform the proposed 'best in show' assessment by an expert panel.”

“Some media and commentators have wrongly conflated the two,” the PC letter said.

“The Commission agrees that risk should be a relevant consideration for any expert panel selecting default superannuation products,” it said. “In our stage 3 draft Inquiry report, we suggested that an expert panel should consider the match between a product's long-term investment return target and risk profile for the types of members who typically default, as well as the likelihood of producing long-term returns for members.”

“We do not consider that a narrow focus on past performance in isolation would be appropriate or desirable,” the PC letter said.

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest developments in Super Review! Anytime, Anywhere!

Grant Banner

From my perspective, 40- 50% of people are likely going to be deeply unhappy about how long they actually live. ...

11 months ago
Kevin Gorman

Super director remuneration ...

11 months 1 week ago
Anthony Asher

No doubt true, but most of it is still because over 45’s have been upgrading their houses with 30 year mortgages. Money ...

11 months 1 week ago

Jim Chalmers has defended changes to the Future Fund’s mandate, referring to himself as a “big supporter” of the sovereign wealth fund, amid fierce opposition from the Co...

1 day 11 hours ago

Demand from institutional investors was the main driver of growth in Australia’s responsible investment (RI) market in 2023, as the industry continued to gain momentum....

1 day 11 hours ago

In a new review of the country’s largest fund, a research house says it’s well placed to deliver attractive returns despite challenges....

1 day 12 hours ago