Regulator warns against 'black box' approach

The deputy chairman of the Australian Prudential Regulation Authority, Ross Jones, has warned superannuation funds they need to be more transparent with respect to how their superannuation balances are being calculated.

Jones told the Association of Superannuation Funds of Australia national conference in Auckland, New Zealand, that he was surprised superannuation fund members had not hitherto seriously challenged funds on the way in which their balances were calculated and the data presented.

“Many members would have considerable difficulty in understanding how their balances have been calculated, and for many members it really is a black box,” he said.

“The fact that many members haven’t taken any action against trustees in this regard I don’t think is proof of any vote of confidence in trustee behaviour,” Jones said. “In fact, the solid returns that members have been receiving until recently has probably caused them to be complacent.

“Interestingly, the anecdotal evidence that we hear is that now members are receiving their statements and finding out the consequences of their arrangements over the past 12 months, they are showing a greater degree of interest in their superannuation,” he said.

“What we might find is that member complacency might be diminished rather than enhanced,” Jones said.