Labor Senate attacks on Australian Prudential Regulation Authority (APRA) executive, Helen Rowell, over superannuation governance changes are the equivalent of Fonzie jumping the shark, according to the Financial Services Council (FSC).
FSC senior policy manager, Blake Briggs has written a column in Money Management’s sister publication Super Review in which he describes comments by Labor Senators that Rowell had acted in a partisan manner as “desperate”.
“It is likely that the industry will look back at the claim the prudential regulator was acting in a partisan manner as superannuation’s version of Fonzie jumping the shark,” he said.
Briggs said that understanding the motivation for attacking the independent regulator required an understanding of how APRA had rejected a longstanding fallacy at the heart of industry fund lobbying efforts — “that special arrangements for industry funds are appropriate as all industry super funds outperform all retail funds”.
“The fallacy was exposed when APRA made it clear the comparisons between industry and retail fund performance never compared like with like,” he said.
“The myth is based upon comparing the investment performance of products catering to older members, which have a greater allocation to defensive assets; to those of younger members, which have a greater allocation to growth assets.”
Briggs wrote that it was unsurprising that the returns were different and returns would also differ when the performance of choice investment options, such as 100 per cent cash or bond portfolio, were aggregated with a diversified MySuper product.
“APRA comprehensively rejected the longstanding fallacy and this rejection has not been disputed,” he wrote.
“Instead, it was met with a feeble attempt to discredit APRA over its use of short-term MySuper performance data as part of its overall analysis of the sector.”
