The Australian Prudential Regulation Authority (APRA) has expressed concern over the unit pricing practices of super funds, after conducting a review that revealed considerable variation in the methodologies used.
Of particular concern was that some funds are failing to adequately monitor and detect calculation errors in time, resulting in substantial losses.
Other issues identified by APRA included a failure to ensure accurate valuation procedures; an over-reliance on external unitised products; buy/sell spreads not being used; differences in collecting fees; and the application of taxation.
In response to the review, APRA says it encourages funds to adopt the IFSA Standards Number 8.00 and 9.00 and Guidance Note Number 4.00 on unit prices.
