Key questions on MySuper costs
The Federal Opposition has signalled it will be testing whether the Government's new MySuper regime will really deliver cost savings to either superannuation funds or the fund members who find themselves defaulting into such products.
Tasmanian Liberal Senator, David Bushby, moved before yesterday's dissolution of the Parliament to file a series of questions on notice to the Australian Prudential Regulation Authority (APRA) not only seeking to determine how many super funds would actually be delivering MySuper products, but the cost base for those products.
As well, Bushby has questioned how many super funds have had their applications for MySuper licensing refused.
Key amongst the questions posed to the regulator is the range of Management Expense Ratio/Indirect Cost Ratio for MySuper licences and the average cost.
He also asked whether the Management Expense Ratio/Indirect Cost Ratio included the Operational Risk Contingency Reserve expenses, which funds include this cost in their ratio, and which funds charge it as an additional expense.
"Does APRA and/or ASIC [Australian Securities and Investments Commission) require that the Management Expense Ratio/Indirect Cost Ratio include the Operational Risk Financial Requirement expenses?" Bushby asked.
A number of superannuation fund executives have complained of the substantial costs incurred in seeking to produce a MySuper product, and questions remain about whether, ultimately, the new regime will prove more cost-effective for members than the previous default fund regime.
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