APRA awards first retail MySuper licence

Colonial First State (CFS) is the first retail fund to secure a MySuper licence from the Australian Prudential Regulation Authority (APRA).

Last week Super Review reported that APRA senior manager Gordon Walker had said its 19 MySuper approvals included 18 industry funds and one public sector fund, with no retail applications yet approved.

CFS said it received authorisation last Friday and would be able to launch its MySuper product before the end of the year. The move would cut its default investment options from the eight it offers currently to just one – a lifecycle option called FirstChoice Lifestage.

Colonial First State general manager of products and investments Peter Chun said MySuper would enable members to compare funds more easily based on key differentiators such as cost, investment performance and the level of insurance cover.

“When a member joins the fund and they have not selected another investment option, they will be placed in the FirstChoice Lifestage option that matches their date of birth,” Chun said. 

Its lifecycle investment option is segmented by members’ ages, with a range of five years. 

“As a member gets older the level of investment risk of the option gradually reduces,” Chun said.  

“This aims to reduce the impact on their retirement savings in the event of substantial falls in investment markets as members near retirement.” 

Industry fund HOSTPLUS has also announced it has received approval to offer its balanced option as its MySuper product from 1 July this year.