The Australian Prudential Regulation Authority (APRA) has released its 2022 MySuper Heatmap.
The heatmap evaluates every MySuper superannuation product’s performance in the areas of investment returns, fees and costs and long-term sustainability of member outcomes. To further enhance industry transparency and product comparison, the heatmap includes each product’s result under the Annual Performance Test.
Key findings from this year’s heatmap include:
- Fees and costs have fallen for most MySuper products. APRA estimates that 8.1 million members (56 per cent of member accounts) have experienced a drop in disclosed total fees and costs since the 2021 heatmap was published. The total estimated annual savings to members is $210 million.
- 28 MySuper products have closed since APRA released the first heatmap in 2019. As a result, 1.5 million member accounts, containing $51.6 billion in member benefits, have been transferred to other products.
- 350,000 fewer members are in MySuper products with “significantly poor” investment performance than in 2021. However, around 800,000 members’ accounts remain in these underperforming products.
- Sustainability pressures exist across the industry, with most superannuation funds posting negative growth over the past three years across one or more of the heatmap’s sustainability metrics.
APRA Deputy Chair Margaret Cole said: “Since 2019, APRA’s MySuper heatmap has been an important tool for eradicating unacceptable product performance, improving transparency across the superannuation industry and holding trustees to account for the outcomes being delivered to members.
“Since its introduction, we have seen costs to members reduced, many underperforming products closed, and a drop in the number of members in funds with significantly poor investment performance.
“However, there are still hundreds of thousands of members in funds with sub-par investment performance, and the industry has serious sustainability issues to address.
“APRA expects that trustees with underperforming products will consider options to transfer members or otherwise restructure their businesses, particularly where sustainability pressures are significant,”
Ms Cole said.
APRA has deferred the update of the data in the Choice Heatmap until 2023. APRA is committed to the publication of the Choice Heatmap, which is being updated using data submitted through the new APRA Connect system for the first time.
APRA has also published updates to FAQs on APRA’s superannuation heatmaps and Superannuation Data Transformation.
The MySuper Heatmap and accompanying information papers are available on the APRA website at: Superannuation heatmaps.