POWERED BY MOMENTUM MEDIA
APRA’s warning on underperformance
No one metric should be used to measure whether or not a superannuation fund can remain authorised to deliver a MySuper offering.
That is the bottom line assessment of the Australian Prudential Regulation Authority (APRA) which has placed some discreet distance between its position and that of the Productivity Commission (PC) on the issue.
Answering a question on notice during Senate Estimates, APRA said that the implementation of many of the Productivity Commission’s superannuation recommendations, such as a ‘right to remain test’, was a matter for Government.
“APRA, however, cautions against using any single measure as a sole determinant of an RSE licensee’s ongoing MySuper authorisation,” it said.
“To assess the performance of a fund, APRA uses both quantitative metrics (including product performance, subject to data availability) and a range of qualitative measures to evaluate the outcomes funds are delivering for their members.”
“APRA agrees that any fund persistently underperforming against a broad range of metrics for a prolonged period of time cannot reasonably argue that it is delivering quality outcomes to its members, and provides a strong ground for removing the ability to accept default contributions,” it said.
“Additionally, over 2020-2021, trustees will be required to submit their first annual outcomes assessment as to whether their funds are promoting the financial interests of their members. APRA considers that these assessments, in conjunction with APRA’s heatmaps, will hold trustees accountable for their performance, which was one of the outcomes sought by the Productivity Commission.”
“Where necessary, APRA will require trustees to take action to address their underperformance.”
Recommended for you
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 Coalition, which has pledged to reverse any changes if it wins next year’s election.
In a new review of the country’s largest fund, a research house says it’s well placed to deliver attractive returns despite challenges.
Chant West analysis suggests super could be well placed to deliver a double-digit result by the end of the calendar year.
Specific valuation decisions made by the $88 billion fund at the beginning of the pandemic were “not adequate for the deteriorating market conditions”, according to the prudential regulator.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
Spire Oaktree Opportunities XI Second Close
61.07 3 y p.a(%)
2
Spire Oaktree Opportunities XI First Close USD
59.21 3 y p.a(%)
3
DomaCom Lot 21 Chellaston Road Munno Para West SA 5115 Australia
31.56 3 y p.a(%)
4
Fidante Credit Suisse Global Private Equity
31.06 3 y p.a(%)
5
DomaCom 4/27 Crombie Avenue Bundall QLD 4217 Australia
26.81 3 y p.a(%)
