APRA concedes costs data incomplete

The regulator responsible for collecting the data that will underpin the Government’s forthcoming review of super_annuation, the Australian Pru_dential Regulation Authority (APRA), has admitted that while it has solid data on superannuation fund perform_ance, it does not have solid sta_tistics with respect to costs.

APRA deputy chairman Ross Jones told Money Man_agement the regulator was the first to admit that it did not have good statistical informa_tion with respect to costs but that this was due in part to the inability of some retail funds to provide the information required.

Jones’ interview with Money Management was held in the wake of criticisms levelled at the quality of the data collect_ed by APRA and the manner in which it handled a confer_ence intended to discuss that data collection.

That criticism was primari_ly levelled by the Financial Planning Association and the Investment and Financial Ser_vices Association. However, the focus on the adequacy and accuracy of the APRA data was further highlighted by research undertaken at the University of Adelaide that was also critical of the regulator’s approach in terms of data aggregation and presentation.

The university research sug_gests that APRA should be providing two sets of statistics — gross and net — with the gross figure providing a measure of true fund manager perform_ance and the net figure pro_viding a measure of the returns for a certain type of fund.

“This will allow the users of the statistics to examine fund manager performance separate from issues surrounding the charging of fees and the bene_fit of extra services that may be provided by particular funds,” the researchers said.

Jones said APRA was keenly aware of the criticisms being directed at it but said: “With all of our statistical collections there is a process we go through and the material is only as good as the data we are supplied.”

However, he made it clear that the regulator was pre_pared to look at the statistics it collected and the dis_aggregation of those statistics.

“If it is an issue then we can have a look at a greater level of disaggregation of the statistics,” he said.

Jones acknowledged that unpublished data provided to the Minister for Superannuation and Corporate Law, Senator Nick Sherry, which formed the basis of a min_isterial submission to the Australian Industrial Rela_tions Commission on underperforming industry super_annuation funds, was the product of disaggregated data.

“When it comes to disaggregation, we have the statistics at a much greater level of fund-specific data,” he said.