International consultancy Willis Towers Watson has encouraged superannuation funds to use the Australian Prudential Regulation Authority’s (APRA’s) heatmaps with caution because they could be misleading for some funds.
The company has published its first superannuation update for the year urging caution on the basis of the data and timeframes used by the regulator.
“We would encourage trustees to use the heatmap with caution, as there are areas where it could be misleading for some fund,” it said.
“APRA has only included three and five-year return comparisons even though many MySuper products were established by rebadging the previous default investment option and so would have a longer performance history.”
“Funds with active management may have underperformed over this period but would be expected to have better performance over longer periods such as ten years,” it said.
“Further, APRA’s assumptions underlying its Simple Reference Portfolio and Benchmark Portfolio may not be appropriate for some funds, while the fee comparisons are not appropriate for members for whom employers meet administration costs.”
Australia’s second-largest super fund has confirmed it is expanding its presence in the UK following significant investment in the region.
A member of the super fund has approached ASIC to investigate potentially misleading or deceptive representations by UniSuper regarding the holdings of its sustainable portfolios.
The median growth fund delivered 1.9 per cent in March, adding to the “stunning” rally that has seen super funds gain 11 per cent since November.
Vanguard has affirmed its support for the current super performance test, emphasising the importance of keeping the process straightforward.
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