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APRA releases new insights on superannuation performance

The Australian Prudential Regulation Authority (APRA) has published new data on superannuation product performance, which sheds further light on the industry’s fees and performance metrics.  

In an insights paper released today, APRA has drawn upon this year’s annual superannuation performance test data to analyse fees and investment returns across MySuper and trustee directed products (TDPs), a subset of the choice sector. 

The findings show:

  • there is significant variance in the administration fees paid by fund members within each of the product segments. This indicates considerable scope for fee reductions across the industry, particularly for trustee directed products;
  • trustee directed products offered through platforms generally have the highest fees. Trustees should review whether the additional services provided to justify the higher fees are delivering value for money to members;
  • larger funds tend to charge lower administration fees, which reinforces the efficiency and cost-savings benefits of scale that exist in superannuation; and
  • while most MySuper products and non-platform trustee directed products are outperforming the investment component of the performance test, more than half of all platform trustee directed products are failing to meet the benchmark. 

APRA has also published each product’s numerical results for this year’s performance test. These figures show how products performed relative to the tailored benchmarks beyond the “pass” and “fail” results announced in August.

The two publications replace this year’s heatmaps as APRA transitions to a more aligned approach to fund performance scrutiny. From next year, a comprehensive transparency package covering investment returns, fees and performance test metrics will be published soon after the annual performance test.

Deputy Chair Margaret Cole said: “APRA is committed to increasing transparency around superannuation performance as a tool to drive better outcomes for members. Today’s publications represent an additional step towards providing the superannuation industry and their members with more detailed analysis of the performance of MySuper and trustee directed products in the performance test. 

"We expect trustees to analyse these results carefully, and – where they have products that are consistently underperforming – take firm action to improve outcomes for their members,” Ms Cole said.

The insights and performance metrics papers are available on the APRA website here: Annual superannuation performance test.

Your Future, Your Super

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The Australian Prudential Regulation Authority (APRA) is the prudential regulator of the financial services industry. It oversees banks, mutuals, general insurance and reinsurance companies, life insurance, private health insurers, friendly societies, and most members of the superannuation industry. APRA currently supervises institutions holding around $9 trillion in assets for Australian depositors, policyholders and superannuation fund members.