Will heatmaps become benchmarks?

The Australian Prudential Regulation Authority (APRA) has confirmed that its new heatmaps will form an important element of the Business Performance Review (BPR) requirement being imposed on superannuation funds.

In new guidance issued to superannuation funds this week, APRA said that it expected that the heatmaps would represent an important starting point for superannuation funds.

The use of the heatmaps is made clear in an attachment to a letter signed by APRA deputy chair, Helen Rowell, responding to industry submissions.

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It states: “APRA expects that the heatmap will be a starting point for comparative metrics and data that an RSE licensee would make use of in its BPR and outcomes assessment for MySuper products”.

However, it said that superannuation fund licensees were expected to look beyond the heatmap to consider a broad range of metrics and factors relevant to their business operations and the delivery of outcomes in order to reach a holistic assessment of performance.

APRA acknowledged that submissions received from some stakeholders had indicated that it would be beneficial for the regulator to develop and mandate the use of specific investment performance benchmarks.

It said some submissions also indicated that guidance should clearly state that the promotion of financial interests to members, as measured by investment returns, was the only measure or consideration upon which to make each outcomes assessment determination.

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