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Super Consumers support APRA heatmaps

Super Consumers Australia welcomes APRA's announcement today to release performance heatmaps for MySuper products.

Super Consumers Australia at CHOICE warmly welcomes APRA's announcement today to release performance heatmaps for MySuper products.

The reform will give people credible metrics to assess and compare how well super funds are delivering to their members, in terms of sustainability, investment performance and fees and costs for the first time.

Regulatory action to remove the tail of underperforming funds was one of the principle recommendations of the 2018 Productivity Commission Inquiry into superannuation.

The difference in retirement balance between someone being in an underperformer and a top performer is $502,000.

"We hope the transparency these heatmaps bring will help cut off the tail of underperformers and boost the retirement savings of Australians," says Mr. O'Halloran.

The heatmaps don't yet include bundled life insurance. We know from a recent ASIC report that poorly tailored life insurance products are resulting in claims denial rates as high at 60%, with rates particularly high for those in intermittent work.

"Poor life insurance design can see some people $85,000 worse off in retirement, paying for cover where, even if they become permanently disabled, may not pay out," says Mr. O'Halloran.

There is much more to be done. We know that the vast majority of funds in the underperforming 'tail' are from the choice sector. With almost $25 billion in investment options that underperformed conservative benchmarks, APRA needs to act quickly to protect consumers from further harm.

"APRA needs to collect data on choice superannuation products as a matter of urgency. Without comparable data we can't ensure that these products are actually delivering for members," says Mr. O'Halloran.