Opposition questions key MySuper costs

The Federal Opposition has signalled it will test whether the Government's new MySuper regime will really deliver cost savings to superannuation funds or default fund members.

Tasmanian Liberal Senator, David Bushby, moved prior to yesterday's dissolution of Parliament to file a number of questions with the Australian Prudential Regulation Authority (APRA) seeking to determine how many super funds would deliver MySuper products and also the cost base for those products.

In addition, Bushby has questioned how many super funds have had their applications for MySuper licensing refused.

Key questions Bushby posed to the regulator were the range of Management Expense Ratio/Indirect Cost Ratio for MySuper licences and the average cost.

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Bushby also questioned whether the Management Expense Ratio/Indirect Cost Ratio included the Operational Risk Contingency Reserve expenses, and further, which funds include the cost in their ratio and which funds charge it as an additional expense.

"Does APRA and/or ASIC [Australian Securities and Investments Commission) require that the Management Expense Ratio/Indirect Cost Ratio include the Operational Risk Financial Requirement expenses?" Bushby asked.

A number of superannuation fund executives have complained of the substantial costs incurred in the development of a MySuper product, and questions remain about whether, ultimately, the new regime will be more cost-effective for members than the previous default fund regime.