APRA shock at MySuper scale concerns
The Australian Prudential Regulatory Authority (APRA) has expressed surprise that super funds are concerned about the trustee duty to assess the scale of MySuper products and its impact relative to other super funds.
Speaking at the Australian Institute of Superannuation Trustees MySuper symposium, APRA senior policy adviser Roger Brown said the test was not difficult and that the data needed to make such a comparison was publicly available from APRA.
"It's not that hard to find out what members are getting as net returns in other funds," Brown said.
While Brown admitted that it wasn't going to be a vanilla comparison, there would be information from APRA to give super funds insight into those differences, and readily identify a peer group to make those comparisons.
However, in an address on trustee governance, Mills Oakley lawyers partner Mark Bland questioned whether super funds could make like-for-like comparisons of MySuper products using APRA's data.
Bland questioned whether super funds could have a strong enough understanding of other funds to make a sensible comparison of their MySuper products.
Bland also asked whether super funds could make comparisons considering the diversity of products that would emerge from the risk appetite of different funds.
Super funds could compare products using a standard risk measure, but subjective aspects of investments and risk appetite would interfere with that, he said.
"What about comparative investments? Do they have to be the same underlying investments to make a genuine comparison?" he asked.
Super funds may need to seek external advice from ratings houses or consultants, he said.
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