APRA to align heatmaps and performance test
Superannuation funds are facing into even greater performance scrutiny with the Australian Prudential Regulation Authority (APRA) signalling that it will aligning its super fund performance heatmaps exercise with Your Future Your Super performance test.
APRA deputy chair, Margaret Cole told a Melbourne conference today that the regulator believed this would provide a comprehensive review of superannuation fund performance and create greater efficiencies for the industry and APRA.
“Since the inaugural MySuper product performance test, the number of products failing the performance test benchmarks has fallen from 13 in 2021 to just one this year. As a result, nine underperforming MySuper products have exited the market and a total of 800,000 members, with combined assets of $39 billion, have moved to better performing products,” she said.
“With the performance test extended to trustee directed products this year, and the heatmaps extended to choice products in 2021, there is even greater light being shone in the super sector.”
“The Performance Test results this year showed 96 out of 805 trustee directed products failed to meet the performance test benchmarks. To their credit, some trustees with multiple failed products have acted promptly to improve outcomes to members by rationalising their offerings. We will monitor such activity closely and other actions taken by trustees to stamp out poor product performance in the choice sector.”
“For 2024, APRA will further enhance public scrutiny of super fund performance, by aligning the performance test and heatmap publications – and the underlying data sets. This will provide a comprehensive review of superannuation fund performance and create greater efficiencies for the industry and APRA.”
Going back decades, studies on mutual fund performances, for instance, show that past performance cannot consistently predict future performance due to the unpredictability of stock market prices. The issue is that while historic performance is worth considering, it can be misleading.
ASIC Media guide = past performance is not a reliable indicator of future performance
APRA = past performance is a reliable indicator for future performance
Beautifully said.
Now the APRA are giving guidance on asset allocation guess they will pick up the bill when everything goes wrong because of their guidance
It’s hilarious that Super funds that failed the test, the following year just went out and hired the same Asset Consultant of the Super funds that passed and “mysteriously” fell in the “benchmark” and became average. Yes, we needed a wake-up in this sector, but I can see where the Comrades in the Australian Public Service are taking us, (via stealth) and all roads lead to consolidation, and a system where contributions go into the National bucket..that bucket dominated by union-controlled Super funds.
APRA time for a pause with the performance as the benchmark, and look at the conflicts of interest and poor service standards in most Super funds.
What’s now needed is a wake up call and a performance test for both APRA and ASIC and I’d guarantee they failed those tests.
What’s the point when the Heat Maps mean nothing ?
I guess the real Agenda is to promote Industry Super, Unlisted Asset Ponzi schemes.
Even the Governments / APRA’s own Heat Map confirmed HESTA Balanced Fund with 94% Growth Assets.
And what does ASIC & APRA do about it = NOTHING.
Industry super can do no wrong.
ASIC & APRA will never bust Industry Super.
ASIC & APRA are Corrupt = REGULATORY CAPTURE CORRUPTION with Industry Super.
How can they compare Watermelons & Grapes and believe their own corrupted rubbish comparisons ???????????