The Australian Prudential Regulation Authority’s (APRA’s) heatmap is an important first step to help superannuation consumers compare ‘apples for apples’ but needs to include rigorous benchmarks, Industry Super Australia (ISA) believes.
ISA said it would help MySuper consumers compare ‘apples with apples’ when it came to performance, fees, and sustainability. However, when APRA announced its heatmap methodology last week, APRA deputy chair, Helen Rowell stressed that the tool was not targeted for consumers but rather industry players.
ISA said with chronic underperformance the heatmaps needed to be applied with equal rigour across the system to the Choice sector. The body said the underperformance of funds was more prevalent across the Choice sector.
It said the focus of the Government, regulator and the superannuation sector needed to ensure members were connected to a single, quality-checked and high performing fund with low fees and good returns.
ISA noted the heatmaps would provide an important bottom-up approach to tackling underperformance, rather than a top-down approach.
Commenting, ISA chief executive, Bernie Dean said: “Too many Australians are still missing out on hundreds of thousands of dollars in retirement savings due to the chronic underperformance of some funds. This is a welcome start but there is more to do”.
“As the custodians of Australians’ retirement savings we all have a responsibility to improve the system and put members’ interests first – and that means dealing with underperformance, wherever it is.”
APRA, in its announcement of the heatmaps, did note that it would looking to extend the tool to Choice products in the future.
