Don’t overstate industry fund outperformance, says Committee

A report of a key Parliamentary Committee has suggested that not too much should be made of the perceived outperformance of industry superannuation funds when compared to retail funds because it is not universal.

The report of the Standing Committee on Economics review of the Australian Prudential Regulation Authority (APRA) led by rising Liberal, Sarah Henderson, pointed to the fact that APRA had stopped short of endorsing the outperformance of industry funds.

Dealing with the question of fund performance, the Committee’s report specifically pointed to comments by APRA’s deputy chairman, Helen Rowell, that “while some industry funds deliver very strong investment performance, the range of performance in the industry fund sector is relatively wide”.

It also cited Rowell’s comments under committee questioning that a “range of performance” also existed in the retail sector, the corporate sector and the public sector” and quoted her as saying “we would not agree with an assertion that industry funds as a whole outperform retail funds or other segments of the industry as a whole”.

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The Committee’s report also pointed to the fact that APRA had confirmed that in light of information that had emerged at the trade union Royal Commission, it had undertaken an exercise seeking more information form a number of industry funds about arrangements they had in place with various sponsoring organisations.

The report cited APRA’s comments that the exercise had “led to a number of changes in some funds in terms of how they managed those related-party arrangements and other arrangements they had in place”.

It also cited APRA’s comments that “there is an ongoing need to improve their oversight of the use of members’ money and there needed to be more transparency around the use of members’ money”.