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Superannuation heatmaps frequently asked questions

These frequently asked questions provide guidance on how to understand the APRA superannuation heatmaps.

Updated: 15 December 2022.

Heatmaps

1. When will the updated Choice Heatmap be released?

The updated Choice Heatmap will be released in early 2023. 

2. What data is used for the 2022 MySuper Heatmap and will be used for the Choice Heatmap?

The Heatmaps use data reported to APRA by RSE licensees under the Financial Sector (Collection of Data) Act 2001 as set out in the following table: 

Section of Heatmap

Reporting standards

Investment returns

For the MySuper Heatmap:

  • Reporting Standard SRS 533.0 Asset Allocation; and
  • Reporting Standard SRS 702.0 Investment Performance.

For the Choice Heatmap:

  • Reporting Standard SRS 550.0 Asset Allocation; and
  • Reporting Standard SRS 705.1 Investment Performance and Objectives.

Fees and costs

For the MySuper Heatmap:

  • Reporting Standard SRS 703.0 Fees Disclosed.

For the Choice Heatmap:

  • Reporting Standard SRS 706.0 Fees and Costs.

Sustainability of member outcomes

For both Heatmaps:

  • Reporting Standard SRS 320.0 Statement of Financial Position.
  • Reporting Standard SRS 330.0 Statement of Financial Performance; and
  • Reporting Standard SRS 610.1 Changes in Membership Profile.

The population for the updated MySuper Heatmap is based on data for MySuper products collected under Reporting Standard SRS 001.0 Profile and Structure. The population for the updated Choice Heatmap will be based on data for in-scope choice investment pathways, collected under Reporting Standard SRS 605.0 RSE Structure.

3. What is the "as at" date for the 2022 MySuper Heatmap?

For the ‘investment returns’ and ‘sustainability of member outcomes’ metrics, are based on data for historical reporting periods up to 30 June 2022. ‘Fees and costs’ metrics are based on data as reported at 1 October 2022.

4. What investment pathways will be included in the updated Choice Heatmap?

The updated Choice Heatmap will cover multi-sector investment options in choice products in the accumulation phase, with standard fees and costs arrangements, excluding options offered on platform investment menus.

Understanding APRA’s heatmaps in the context of the new Annual Performance Test 
 

Under the Government’s Your Future, Your Super reforms (the YFYS reforms), APRA is required to conduct a performance test for MySuper and choice products. This is an annual test that assesses the investment returns and administration fees of MySuper products and trustee-directed products (TDPs). Since 1 July 2021, the annual performance assessment has applied to MySuper products, and from 1 July 2023, trustee-directed products are also expected to be subject to the assessment.

1. How do APRA’s heatmaps support the annual performance test? 

The heatmaps supports the performance test by providing additional insights across multiple dimensions and by providing a detailed data set for users to explore. 

The performance test is a single metric, whereas the heatmap provides a range of metrics over a range of time periods so that users can compare the performance relative to a number of benchmarks and over different time horizons.

MySuper Heatmap FAQs

General questions on the Heatmap

1. Where can I find MySuper product performance against the annual performance test in the MySuper Heatmap?

The MySuper Heatmap includes two columns to show whether a MySuper product passed or failed the annual performance test and the product’s numeric result for the annual performance test. The performance test results are located to the left of the investment returns metrics in the MySuper Heatmap.

2. Does the Heatmap include all MySuper products?

Yes. The MySuper Heatmap includes all MySuper products (both single strategy and lifecycle products) offered by RSE licensees at the fees and costs “as at” date of the MySuper Heatmap.

Useful information for consumers seeking to better understand superannuation can be found on the Australian Securities and Investments Commission’s MoneySmart website.

3. How can APRA be confident that the data underpinning the MySuper Heatmap is correct?

The MySuper Heatmap uses data reported by RSE licensees under mandatory reporting obligations, which are required to be of high quality and accurate. APRA also requires RSE licensees to promptly address data anomalies identified and weaknesses in their data management frameworks.

4. Which external consultants did APRA use to validate its methodology on MySuper Heatmaps in 2019?

APRA regularly engages with external specialists to assist with specific projects such as the development of the Heatmap and its Superannuation Data Transformation Program.

The following consultants were engaged to assist with the initial development of the 2019 MySuper Heatmap:

David Bell - APRA engaged David Bell in a consulting-style capacity during the development of the MySuper Heatmap. In this capacity David reviewed and provided observations and suggestions on APRA’s proposed heatmap metrics relating to investment returns.

Deloitte - APRA retained Deloitte in the early stages of the MySuper Heatmap development through a short-term consulting engagement. In this engagement Deloitte reviewed and provided summary observations on APRA’s initial proposed metrics and high-level methodology used in two areas - specifically investment returns and fees and costs.

  • No formal opinion or report was provided by Deloitte to APRA. Deloitte provided observations to APRA for the purpose of informing APRA’s further work on the Heatmap. Deloitte was not engaged and did not review the final versions of the MySuper Heatmap metrics, methodology or reporting as launched by APRA.

Rice Warner – APRA retained Rice Warner in the MySuper Heatmap development through a short-term consulting engagement. In this engagement Rice Warner reviewed and provided summary observations and feedback on APRA’s proposed metrics and high-level methodology. Rice Warner also reviewed draft calculations of the metrics in the Heatmap and provided observations on the application of the methodology and on the interpretation of the data used as inputs to the methodology. 

  • No formal opinion or report was provided by Rice Warner to APRA. Rice Warner provided observations and feedback to APRA for the purpose of informing APRA’s further work on the Heatmap.

 

Choice Heatmap FAQs

General questions on the Heatmap
 

1. Why does the Choice Heatmap include choice products and choice options?

A fund may offer multiple choice products - each choice product typically has a separate Product Disclosure Document (PDS). Within each product, a range of investment options are offered to members. Investment return and fees and costs metrics are presented in the Choice Heatmap at the investment option level. 

For example, ABC Super Fund has two choice products and each product has four investment options.

RSE name Choice product name Choice option name

 

 

 

ABC Super Fund 

 

ABC Super - Corporate

ABC Corporate - Balanced
 ABC Corporate - Capital Stable
ABC Corporate - Conservative
 ABC Corporate - High Growth

 

ABC Super - Personal

ABC Personal - Balanced
ABC Personal - Capital Stable
ABC Personal - Conservative
 ABC Personal - High Growth

2. Why can’t I find my choice option in the Choice Heatmap?

The Choice Heatmap does not cover all choice investment options, only a segment of the choice sector is covered.

3. What are APRA’s expectations of RSE licensees where the Choice Heatmap identifies areas of poor performance?

APRA expects RSE licensees to reflect on their performance in the Choice Heatmap and undertake analysis to assess the drivers of poor performance and take prompt action to improve performance. APRA expects this analysis is reflected in the RSE licensee’s annual outcomes assessments and business performance review.   

4. Why has APRA included a growth asset allocation category in the Choice Heatmap?

As a wide range of investment options may be offered within different choice products, investment options in the Choice Heatmap have been categorised into one of five growth asset allocation categories (0-40%, 40-60%, 60-75%, 75-90%, 90-100%) to enable comparison of similar investment options.

Technical questions    
 

1. Given the wide range of different investment styles and strategies in the choice sector, will APRA apply different benchmarks to different options?

The Choice Heatmap provides objective and comparable insights into key financial aspects that influence member outcomes across the choice sector. To allow for comparisons between choice investment options, APRA has applied a consistent approach to assess all multi-sector options in the Choice Heatmap.

 

General questions on both heatmaps
 

1. What do the heatmaps show?

The heatmaps enable like-for-like comparisons of outcomes being delivered to members in MySuper products and certain choice investment options, in the key areas of investment returns, and fees and costs. The heatmaps also provide growth trends for an RSE licensee’s business operations, which are relevant to assessing the sustainable delivery of member outcomes.

The heatmaps seek to foster a focus on continuous improvement across the superannuation industry by providing clear, credible and useful insights into the outcomes delivered to members.

2. How should the heatmaps be interpreted?

The heatmaps use colour to show how well a MySuper product or choice investment option is delivering appropriate outcomes for its members, relative to its peers and benchmarks.

  • When looking at investment returns, any product or option that is performing above a determined benchmark is coloured white. A colour gradient from pale yellow to crimson has been used for products and options that are performing below that benchmark.
  • For fees and costs, the colours have been applied slightly differently. Products with lower fees are coloured white through to amber and those with higher fees are coloured amber through to red.
  • For sustainability of member outcomes, products are coloured either white or amber, with amber indicating areas of concern that require further investigation to ensure appropriate member outcomes can continue to be provided into the future.

Importantly, APRA is not providing an overall assessment of each product based on all the metrics. Each MySuper product and choice investment option is assessed against each metric; a range of measures is necessary to assess performance outcomes. The heatmaps do not currently include measures of the value or performance of insurance offered, or the quality of other features such as member services.

3. Should I use the heatmaps to decide which MySuper product or Choice investment option to invest my retirement savings in?

The heatmaps are not intended to be used in isolation when making decisions about where an individual member directs their retirement savings. They are designed to enable like-for-like comparisons of outcomes being delivered by every MySuper product and certain choice investment options in the key areas of investment returns, and fees and costs. The heatmaps do not currently include measures of the value or performance of insurance offered, or the quality of other features such as member services.

The heatmaps are not a substitute for independent professional advice. Useful information for consumers seeking to better understand superannuation can be found on the Australian Securities and Investments Commission’s MoneySmart website.

Members who wish to compare the investment performance or fees of MySuper products can also use the YourSuper comparison tool.

4. My MySuper product or choice investment option shows up as all/mostly white. Does that mean it is an excellent MySuper product?

White (or absence of colour) indicates a MySuper product or a choice investment option has been performing above benchmarks for investment returns and fees and costs. It doesn’t mean there is no room for improvement for the MySuper product or choice investment option. Further, past performance is not a guarantee of future performance.

The heatmaps are not a substitute for independent professional advice. The heatmaps are not intended to be used in isolation when making decisions about where an individual member directs their retirement savings.

5. My MySuper Product or choice investment option shows up as mostly orange/red. Does that mean I should choose a different MySuper product, choice option, or move to another superannuation fund? 

A MySuper product or choice investment option that is ‘orange’ or ‘red’ on a particular metric in the heatmaps indicates that it has performed poorly against a benchmark for investment returns and fees and costs. A MySuper product or choice investment option with mostly orange / red indicates that APRA has concerns.    

Members could consider the Australian Tax Office’s YourSuper comparison tool, which incorporates the findings of the MySuper performance test. Useful information can also be found on the Australian Securities and Investments Commission’s MoneySmart website, for members seeking to better understand superannuation.

In addition, it is important to understand the actions RSE licensees are undertaking (or going to take) to address the areas where they are underperforming. Details contained within the Annual Outcomes Assessment and Annual Report, or discussed during Annual Members’ Meetings, may be helpful.

6. Does the heatmaps cover returns delivered to members? 

Yes. The heatmaps provide metrics covering MySuper products.

7.  What does APRA mean by sustainability? Why does it matter?

Sustainability of member outcomes refers to the RSE licensee’s ability to continue delivering good financial outcomes to members into the future, and/or address areas that require improvement.

In an industry where retirement outcomes are delivered over decades, RSE licensees must be able to deliver quality outcomes over the long term if they are to truly safeguard their members’ best  financial interests.

8. Why are there grey cells with no values in the heatmaps?

Grey cells indicate insufficient historical data (due to lack of investment returns history and/or asset allocation data) to produce the relevant metrics; as a result there are no values for these items in the heatmaps.

9. How often will APRA publish the heatmaps? 

APRA intends to publish both the MySuper Heatmap and Choice Heatmap on an annual basis, with additional updates as deemed necessary.

10. Where can users provide feedback on the heatmaps?

Users can provide feedback on any aspect of the MySuper Heatmap and Choice Heatmap by emailing DataAnalytics@apra.gov.au.

 

Technical questions about both heatmaps
 

1. Why did APRA use target strategic asset allocation rather actual asset allocation in one of the reference portfolio benchmarks?

APRA has considered the merits of both approaches and has determined that using the strategic asset allocation is appropriate for the following reasons:

  • The strategic asset allocation considers the RSE licensee’s board-approved investment strategy: measuring actual returns against the RSE licensee’s strategic intent (i.e. the strategic asset allocation target) enables measurement of the RSE licensee’s asset allocation decisions (for example whether decisions to overweight or underweight certain asset classes have added value).
  • Actual asset allocation is inherently unstable and is affected by market movements: using actual asset allocation to construct the benchmark portfolios will only measure a product’s return relative to asset class benchmarks i.e. value added or detracted from asset class implementation only.

This approach was validated and supported by the external consultants engaged by APRA in 2019.

2. How has APRA chosen the growth and defensive allocation split for infrastructure and property assets which have been reported as listed or unlisted?

There are multiple ways of investing in infrastructure and property assets, for example through listed vehicles (e.g. REITS) or through unlisted investments (e.g. the direct purchase of property). The method of investing in these assets has an impact on the types of exposure provided. Listed investments typically have a high correlation with equity investments and therefore offer limited protection in the event of an equity market downturn. APRA has accordingly classified these assets as 100% growth.

While unlisted real asset investments are sensitive to economic conditions, they also demonstrate some characteristics associated with defensive assets, such as income generation. To account for the slightly more defensive nature of unlisted assets, APRA has categorised these assets as 75 per cent growth and 25 per cent defensive.

3. Can APRA disclose the index level data so that calculation can be re-performed?

No. Index level data are subject to confidentiality under the terms of the licensing agreements with the index providers.

4. Do the heatmaps take into account discounted fees for employer plans?

The Heatmaps are designed to enable like-for-like comparisons of outcomes being delivered to members who would join the superannuation product as a personal member (e.g. in the case of switching funds). As a result, the highest fee disclosed in the Product Disclosure Statement (or rack rate) is more likely to apply and is therefore reflected in the heatmaps.

5. How do the heatmaps adjust for riskiness of assets in assessing investment returns?

The heatmaps consider investment risk associated with exposure to growth assets and certain asset classes. This is achieved by: 

  • classifying investment options into one of the five growth asset allocation categories in the Choice Heatmap. 
  • adjusting the Simple Reference Portfolio to match the total exposure of growth assets for each investment option in both heatmaps; and
  • adjusting the Strategic Asset Allocation benchmarking portfolio to match the strategic asset allocation of each individual investment option in both heatmaps.

APRA is committed to the continuous improvement of its heatmaps and welcomes feedback from the industry.