The Australian Prudential Regulation Authority (APRA) has released details of the “superannuation heatmap” it is to publish next month, providing insights into the outcomes being delivered by the MySuper scheme.
MySuper is the superannuation initiative introduced to deliver simple and cost-effective default superannuation products for Australian workers.
Deputy Chair of APRA, Helen Rowell revealed a sample of the heatmap at a recent conference of the Association of Superannuation Funds of Australia, saying it represented a major step forward for superannuation transparency and accountability.
“One of APRA’s core strategic priorities is improving member outcomes in superannuation,” Mrs Rowell said.
“The heatmap is intended to help drive improvements across the industry by highlighting which MySuper products are underperforming and where they need to improve,” she said.
“It forms part of APRA’s broader suite of actions to enhance member outcomes, including strengthening the prudential standards, enhancing the superannuation data collection, intensifying APRA’s supervision approach and improving industry transparency.”
She said that unlike a sea of numbers on a spreadsheet, areas of red in the heatmap send a clear and strong message that is hard to ignore.
“(That) is our intent,” Mrs Rowell said.
“As much as transparency is important, the ultimate purpose of the heatmap is to have trustees with areas of underperformance take action to address it.”
To reinforce this, she said, the heatmap would inform APRA’s supervision priorities and trustees could expect its supervision intensity to reflect the intensity of the colour shading on the heatmap.
Mrs Rowell said APRA would engage with trustees to ensure both the heatmap and the Authority’s expectations for its use would be well understood.
“This includes meeting with trustees that the heatmap identifies as having clearly underperforming MySuper products and ensuring they deliver on plans to address this in a timely manner.
“In most cases, this will be a continuation of the supervisory action that APRA has already taken with these entities to address identified areas of poor member outcomes,” she said.
“If trustees don’t fix these issues within a timeframe that is acceptable to APRA, we will be requiring them to consider other options, including a merger or exit from the industry in some cases.”
The full heatmap will be published on the APRA website by mid-December but a sample of what it could look like can be accessed at APRA at this PS News link.
