POWERED BY MOMENTUM MEDIA
Super performance test will promote mediocrity
The Budget measure that will block underperforming superannuation funds from taking new members is draconian, overly simplistic, and will promote index relative mediocrity, according to JANA.
JANA principal consultant, Matthew Griffith, said the move would reduce industry innovation and reduce the appetite for trustees to be different.
The approach, he said, was heavy-handed, interventionist, and ignored natural market forces and regulatory changes which had in the past resulted in heightened competition, consolidation, and pressure to maintain strong member outcomes.
“The ink is barely dry on recent regulatory innovations that are focused on member outcomes, creating heightened uncertainty with respect to retirement policy stability for members and the industry,” Griffith said.
“Further, this proposed change will potentially drive the market towards an oligopoly structure made up of ‘index huggers’ and mean more mediocre results for members.”
Griffith noted that the test only assessed funds on one criteria, the constant tinkering of super rules undermined confidence in the system and provided challenges for retirees attempting to plan for their retirement over long time horizons, and that this would prompt more extreme progression towards industry consolidation.
“We fear that the drive to be within 0.50% of an index benchmark will result in an ‘averageness’ mindset that might blunt enthusiasm for adopting points of difference which may be truly beneficial to members over the longer term,” he said.
Recommended for you
The superannuation industry will be judged by its member services rather than how effectively it accumulates wealth, according to Stephen Jones.
The profit-to-member super funds are officially operating as a merged entity, set to serve over half a million members.
Super Review announced 21 winners at the annual Super Fund of the Year Awards, including the recipient of the prestigious Fund of the Year Award.
A research firm has given UniSuper a glowing review, praising its strong leadership and “compact team”, as well as its “creditable governance” structure.
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
32.57 3 y p.a(%)
4
Fidante Credit Suisse Global Private Equity
32.09 3 y p.a(%)
5
DomaCom 4/27 Crombie Avenue Bundall QLD 4217 Australia
27.42 3 y p.a(%)
