Super funds pushing back on comparison tool, says watchdog

Super watchdog butts heads with funds over a comparison tool that could quickly and reliably allow members to assess performances.

butt heads

The superannuation watchdog is butting heads with the funds management industry over an official comparison tool that could quickly and reliably allow members to assess the performance of funds.

Australian Prudential Regulation Authority (APRA) member Helen Rowell told a meeting of Australia’s biggest super funds that a comparison tool, which has been under development for more than a year, would give consumers and regulators “a clearer picture of who is, and who is not, doing a good job with members’ money”.

The tool would reveal the worst performers in the  $2.9 trillion sector, she said, according to a report in The Australian.

The super industry has been under pressure since the Productivity Commission (PC) revealed millions of members had been defaulted into funds that persistently underperform and that unwanted – and sometimes unknown – insurance products had been eroding balances. But it was the underperforming funds that was most troubling – and most costly –  with estimates that a quarter of funds had been short-changing workers by as much as $400,000 over their working lives.

Identifying the underperformers is the challenge for consumers.

“Too many members are invested in funds that consistently deliver sub-par outcomes,” said Ms Rowell, “potentially reducing members’ retirement incomes by hundreds of thousands of dollars over a working life.

“A lack of transparency and the complexity created by the sheer number of products and options on offer has hindered member engagement, and made it much harder to assess performance across the full spectrum of the industry.”

Much of the data relating to funds’ performances is available in APRA publications, but the industry has “baulked at the regulator presenting it in a way consumers can digest”, The Australian report says.

“It’s somewhat disappointing to us that the prospect of APRA presenting already publicly available data with its own lens on performance is generating a considerable amount of vocal pushback,” Ms Rowell said.

“We suspect the real concern for many trustees is the prospect of having their performance publicly exposed in a simpler, credible and insightful way by APRA – especially among those with an inkling that their place on the heat map will be at the hotter end of the colour spectrum.

“Given the important role of the APRA-regulated superannuation industry, it’s difficult to argue that stakeholders are not entitled to be given a clearer picture of who is, and who is not, doing a good job with members’ money.”

Ms Rowell repeated a statement made by APRA chairman Wayne Byers, who said: “If in this day and age a trustee cannot reliably, accurately and quickly provide information on assets, returns, fees and costs for all their products across a range of dimensions … one wonders how they will meet heightened standards for assessing the outcomes being delivered for their members.”

Are you able to comfortably compare the performance of your super or pension fund? If not, why not? Should a comparison tool be readily and freely available?

If you enjoy our content, don’t keep it to yourself. Share our free eNews with your friends and encourage them to sign up.

RELATED ARTICLES





    COMMENTS

    To make a comment, please register or login
    BrentonG
    15th Oct 2019
    10:58am
    I agree passionately with the article about super funds pushing back on a comparison tool, I struggle to obtain specific fund comparison information to help drive decision making. But this is not only relevant to super funds, health insurance is a minefield that’s hard to navigate and compare apples with apples, and even power supply comparisons can be tricky with different rates and discounts. I applaud any moves by government and YLC in pressing for change.
    LFC
    15th Oct 2019
    11:55am
    Agree 100%...Numerous groups really give you nothing of value to use. In my view Health leads the pack, I would nearly say there is collusion to keep members uninformed and as such there is no way to compare apples with apples. So called Gov't support / admin groups useless.
    TREBOR
    16th Oct 2019
    11:50am
    Profit before people, LFC, and the the New Robber Baron operating on Greed Is Good.... the attitude that everything can and should be treated as a 'business opportunity' - especially if YOU are in the government or married or related to someone who is, has taken over this nation - and not for the best.

    Bring On The Revolution! (we're gonna need a us a bigger line of guillotines)...
    VeryCaringBigBear
    15th Oct 2019
    11:04am
    I have yet to find a comparison tool that actually works.
    Horace Cope
    15th Oct 2019
    11:12am
    Anything that creates transparency has to be a positive step. The government's change to standardise electricity companies to have a base rate applicable to all so that offered discounts could be properly compared was a positive step. Superannuation Funds that are resisting may have something to hide, be it inability to achieve a high return, excessive management fees or too many board members being paid exorbitant salaries.
    VeryCaringBigBear
    15th Oct 2019
    11:20am
    None of those electricity comparison sites work either.
    Greg
    15th Oct 2019
    8:37pm
    VCBB - work for me, maybe you're using them incorrectly. I can feed in our actual use for the last year and the site calculates the best prices from every company.
    GrayComputing
    15th Oct 2019
    11:45am
    I lost over $300K of my super with the bunch at MLC, total @#&*^%, and them still charging even more fees while loosing it !
    Thus I cannot wait for a Strong Super regulator to kick them all these robber barons where it hurts
    VeryCaringBigBear
    15th Oct 2019
    11:50am
    I simply don't invest in managed funds as they are full of hidden fees.
    inextratime
    15th Oct 2019
    12:27pm
    Managed or SMSF's, all have fees. some of the SMSF's are higher than most people will admit.
    Agreed that are not hidden but they are not inconsequential either.
    VeryCaringBigBear
    15th Oct 2019
    2:31pm
    Total fees on my SMSF are 0.14% per year. Please tell where I can find a super fund with lower fees.
    inextratime
    15th Oct 2019
    4:16pm
    No doubt you do not cost out the time that you spend checking out your investment choices.
    VeryCaringBigBear
    17th Oct 2019
    1:56pm
    I save 5% in fees or more so that makes my time spend very valuable which is more than I'd ever earn in a job.
    johnp
    15th Oct 2019
    12:34pm
    Try this site, I have found it to be useful
    https://investmentcentre.moneymanagement.com.au/
    VeryCaringBigBear
    15th Oct 2019
    2:35pm
    AMP certainly has a lot of super funds doing very well on that site.
    johnp
    15th Oct 2019
    2:49pm
    Just had a look and I notice one of AMP's portfolios was shown in the top 50 so hope the credibility of investmentcentre has not been dented
    On the Ball
    15th Oct 2019
    1:17pm
    I had no trouble whatsoever, getting the relevant and current information I needed to allocate my funds into an appropriate super fund, well before I even dreamed of retiring. I monitored it casually at first but when the GFC hit (which I mostly avoided because I had done my homework) I then commenced regular comparisons. Managed it as best I could. Now I am retired, I have moved the nest egg into another fund that pays more and charges less than the fund that I was in (who paid well, and had low charges, but that changed when I went into retirement phase - hence I changed funds).
    Its not rocket science. Its just a matter of paying attention and comparing funds (and strategies within funds).
    Too busy? Not interested? "Shouldn't have to do all that"? Why not?
    ITS YOUR MONEY!
    KSS
    15th Oct 2019
    2:25pm
    Ah yes On the Ball, but tht means you have to take personal responsibility. It is so much easier to ignore it then blame someone else if/when it goes pear-shaped.
    On the Ball
    15th Oct 2019
    7:03pm
    Yes KSS. And it has to be done EARLY, like when you get your fist job. But, its never too late.
    Well, it is once you retire and start to lose the mental agility to undertake the task. THEN it becomes "just too hard". What also doesn't help is articles in the popular press that say again, "Its just too hard" which just re-enforces that.
    Set it up while you can, then you dont have to worry about it when you are retired.
    TREBOR
    15th Oct 2019
    1:34pm
    Of course any vested interest will fight tooth and nail to protect and preserve their own nice little money earner.... (notice I draw no distinctions here between industry and retail super funds) ... the alternative to the current (failed) private business model (which pervades industry super funds as well, though their fees are generally lower) is either a totally regulated super system - or the mysterious one-stop shop promoted by Yours Truly, from which investment can be made on the basis of loans to government (etc) for projects that will enhance the economy and future of THIS nation.

    As things stand - there are trillions of dollars tied up in super funds - and much of the earnings from these are going into the pockets of those handling them.... not their constituents (members) or this nation as a whole. Think how many water projects could be funded via loans to government on agreed interest rate...
    VeryCaringBigBear
    15th Oct 2019
    2:39pm
    That's why I have a SMSF. I get to keep all those fees including the hidden ones.
    On the Ball
    15th Oct 2019
    6:59pm
    100% treboR.
    I fear the day when those trillions will be too tempting for a once-only killing.
    Gov sets up a Super alternative. It becomes the default (by legislation). It grows, then is sold off to a private concern who is then taken over by an overseas "investment Company" who then take it all offshore and pay no tax...
    TREBOR
    16th Oct 2019
    11:57am
    .. park it with the 'Future Fund, OTB - your own government would do it for their own ends... under the Howard Way... just take it out of the Tresuria Nacional when things are looking good (cook the books so there is permanent surplus, por favor), and put him away for the good of the nation... and so you and your co-conspirator, Don Pedro Castella, can be paid to look after him while still receivinghis government handout for life and more.

    That's the good old Central American Banana Republic way so beloved of Howard and Costello.... just lift a few lazy bill from the treasury for your own and your mates' benefit. and yet I seem to be the only voice here on this Grand Theft Canberra...

    What's to stop them doing the same with all your super money - for your own good...?
    TREBOR
    16th Oct 2019
    11:59am
    .. after al... your home is not your own.. your non-cash-bearing assets are not your own... you may have paid for them during your honest working taxpaying life.. but the government retains the sole right to tax you on them, not only in retirement, but in death...

    Come on, people... where's the anger? We need a Hong Kong solution here... no deportation of our dollars back to the Treasury mainland in retirement or after we pass on....
    TREBOR
    17th Oct 2019
    12:03am
    OK - I'll try to explain it to you .....

    When you accumulate non cash-bearing assets during your working life - they are yours pure and simple. They should never - no non cash-bearing asset - be included in any 'assets/incomes test', for the simple reason that they do not earn income.

    However - when you apply for pension, these are all taken no account as if they are cash-bearing assets, and not cash-losing assets that they are in reality.

    As someone said - that is a tax on those retiring and applying for pension.

    Then when you sell off one of those assets - whatever you receive from its sale is deemed to be income - even though it has been taxed already through your working life, and then in your retirement pension (whether you receive it or not).

    If you do not sell any of it off and take that second taxation (pensions assessment) on the chin - and you pass on (as they say we all must, but not me) - your inheritors will then have to pay tax on your assets that they sell off or even inherit = triple tax on the assets earned by the average worker.

    Tell me one business or even SMSF that pays that on cash-bearing assets.... to set up a shares portfolio means you cop a tax haven for the cost of shares and costs already ... you only ever pay tax on the post deduction earnings.. and if you manipulate that into a 'superannuation' fund - you will pay zero tax.

    So your average Jo Blow is being royally hood-winked and taken for a ride... he/she pays every way every day - and the 'betters' get a free run...

    Doubt me? Look at VCBB/OG and his cash manipulation, a method he claims to have learned after three bouts with cancer and with a capital base of $400k returning $80k annually after all costs....

    You, the ordinary person in Oz - are being ribbed daily, and it's all 'legal'.
    floss
    15th Oct 2019
    2:34pm
    Thank you Trebor for a little bit of common sense some thing our leaders are lacking.
    TREBOR
    16th Oct 2019
    12:00pm
    I didn't think it was that good - some think me crazy... but they don't know me.
    Devilinthedetails
    15th Oct 2019
    3:26pm
    Reading these comments makes it abundantly clear each of us have different experiences and circumstances, and it just shows that we need to do our own research to suit our unique situation. I regret some choices made in the past mainly due to lack of experience or ignorance of a wider picture. Sharing them is good for readers to analyse. I found the Choice Magazine article by Andy Kollmorgen titled "How to find the best superannuation provider" that appeared on 1st February 2017 - YES (2 years and 9 months ago) very concise and informative with details of super comparison websites available at the time. But the essential message was do your own research.
    Here is a link to it => https://www.choice.com.au/money/financial-planning-and-investing/superannuation/buying-guides/super
    jaycee1
    16th Oct 2019
    10:10am
    The funds wouldn't be 'pushing back' if they were doing the right thing by their customers. Unfortunately the vast majority are ripping people off, while paying themselves huge salaries that they don't earn.
    TREBOR
    16th Oct 2019
    12:01pm
    Yup - nothing to hide - nothing to dispute over transparency.


    Join YOURLifeChoices, it’s free

    • Receive our daily enewsletter
    • Enter competitions
    • Comment on articles