APRA maintains pressure on super funds
The Australian Prudential Regulation Authority (APRA) has revealed the degree of pressure it applied to underperforming superannuation funds ahead of the release of its first “heatmaps” last year and the reality that those funds remain under pressure.
The regulator has revealed the degree of pressure applied in its first-ever “Year in Review” publication covering 2019 and makes clear that it contacted underperforming funds ahead of the release of the heatmaps to ask those funds what they going to do about the situation.
It confirmed that in the absence of those superannuation funds acting to turn their performance around, they would need to consider mergers or actually exiting the industry.
“Ahead of its [the heatmaps] release, APRA contacted the trustees of the worst performing products and asked them to provide or update action plans outlining how they intended to address identified weaknesses,” the Year in Review document said.
“If these trustees are unable to make substantial improvements in good time, APRA will consider other options, including the need for the trustees to consider a merger or to exit the industry.” It said.
“However, APRA expects all trustees, regardless of how their funds appear on the heatmap, to reflect on the drivers of their current performance, and to identify where they can do better.”
A number of superannuation fund trustees have questioned the methodology utilised by APRA in the heatmaps and the accuracy of the underlying data.
Recommended for you
AMP is to launch a digital advice service to provide retirement advice to members of its AMP Super Fund, in partnership with Bravura Solutions.
Unveiling its performance for the calendar year 2024, AMP has noted a “careful” investment in bitcoin futures proved beneficial for its superannuation members.
SuperRatings has shared the median estimated return for balanced superannuation funds for the calendar year 2024, finding the year achieved “strong and consistent positive” returns.
The second tranche of DBFO reforms has received strong support from superannuation funds and insurers, with a new class of advisers aimed to support Australians with their retirement planning.
