APRA needs to get heat maps right before going public

The relative performance of superannuation funds under the Australian Prudential Regulation Authority’s (APRA’s) new heatmap approach should not be made public until a full consultation has taken place and the regime is fully settled.

The risk of doing otherwise would be an unjustified unsettling of member confidence in their superannuation funds.

That was the bottom line of a roundtable conducted by Super Review during the recent Association of Superannuation Funds of Australia (ASFA) national conference in Melbourne, with fund chief executives urging APRA to take a consultative and iterative approach.

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Speaking during the roundtable, sponsored by Tech Mahindra, Deloitte superannuation partner, Russell Mason said that it was crucial that APRA’s heat map-based findings did not make it into the public domain until they had been appropriately validated.

“I just hope that before discussion gets into the public domain, that APRA have long and detailed discussions with trustees and that they are given every opportunity to put forward their case to eliminate any misconceptions,” he said.

This was consistent with the views of AustralianSuper chief risk officer, Paul Schroder who said his fund was broadly supportive of the direction APRA was taking provided it was an iterative approach.

He said that while superannuation fund members needed more information, the reality was that APRA was unlikely to get it 100% right on the first outing.

LegalSuper chief executive, Andrew Proebstl reinforced the need for an iterative approach but said much confusion could be removed if APRA had been less secretive about which funds had been under-performing.

“When they do publicise [the names of the funds] it will help us to focus on what we need to do,” he said. “When they do, most of us will probably say yeah, they really are underperforming.”

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