Funds question Choice heatmap methodology
Superannuation funds have raised questions about the methodology used for the Choice heatmaps, according to the Australian Prudential Regulation Authority.
Last week, the Treasury said it had concerns over data accuracy and presentation of the Choice heatmaps which had been more difficult to compile than for MySuper funds.
Speaking to Senate estimates, APRA executive director for superannuation, Suzanne Smith, said trustees of poorly-performing super funds were concerned about the methodology used rather than data accuracy.
“Most of those trustees haven't raised issues so much in relation to the accuracy or the quality of the data we used for the choice heatmap, which was the super ratings data. Nor have they raised questions about whether it was appropriate for us to use it. What they've raised some questions about is the methodology for mapping the data.
“The super ratings data isn't at a level of granularity that it would be if we had our own data. So the collections that we will do in the super data transformation program will take that data to another level of granularity, which should improve some of those elements.
“What we've seen is the majority of trustees, though, acknowledge that their performance has been poor. Those poorly-performing funds that were recorded in the choice heatmap have acknowledged that their performance was poor and that they have started to look at what actions they can take to improve that performance which will ultimately be of benefit to members.”
Smith said she was hopeful that the trustee-directed performance test would be ready for the 1 July start date.
AUTHOR
Laura Dew
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.
