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Super returns not the be-all and end-all
The MySuper dashboard gives undue focus on disclosing information on returns, propped up by the standard life measure, which reports the predicted frequency of negative return years.
That was the finding of a report by the Centre for International Finance and Regulation (CIFR), which said focusing on performance will breed "peer-focused behaviour and short-termism", which takes focus away from accumulating enough income for retirement.
Titled ‘The Superannuation System and its Regulation: Views from Fund Executives', respondents in the report said they wanted to see more focus on attaining retirement goals.
"Getting excited that superannuation funds have been generating strong double digit returns over the past year. So what?" one fund executive argued.
"It's how much you're accumulating and whether you're going to have a balance that's going to provide an income stream in retirement. Are we on track, and if I'm not, what do I do about it?"
The report also noted disclosed fees can not only be misleading, but the way it is reported can lead to "dysfunctional behaviour" and could lead to gaming.
"What I want to know is exactly what services they are providing and how much they're charging me for those services," another executive said.
"How much are they charging to be my agent? And the problem with the fee disclosure is that it is all over the place … and typically the agents simply do not disclose what they are taking out to provide their services."
Interviewees argued the way in which fees are reported should not act as a hurdle to choosing the right investment avenue.
They also said fee disclosure should be reported in three parts: the total collected by the fund provider as an "agent", and the amount paid to related and external parties like investment managers.
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ACS FIXED INT - AUSTRALIA/GLOBAL BOND
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3y(%)pa
1
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2
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3
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31.56 3 y p.a(%)
4
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5
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26.81 3 y p.a(%)
