APRA starts project to collect more and better super fund data

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APRA has started work on a project to transform the collection of data about superannuation funds, including around Choice products and investment options.

APRA has announced the multi-year ‘Superannuation Data Transformation’ project, to improve the “breadth, depth and quality of its superannuation data collection”.

“APRA’s Superannuation Data Transformation aims to drive better industry practices and improve member outcomes by significantly enhancing the comparability and consistency of reported data. The project will make it easier to scrutinise and reliably compare fund and product performance, especially in the choice segment of the market,” said APRA.

The Superannuation Data Transformation project will have three stages:

  • Phase 1 ‘Breadth’ – focused on the most urgent gaps in the data, including Choice products and investment options. Running from late 2019 to mid 2020.
  • Phase 2 ‘Depth’ – use new capabilities to improve the “granularity” of the data. Running from 2020 to 2021.
  • Phase 3 ‘Quality’ – assess the quality and consistency of the data found in the first two phases, work on implementation issues and further enhancements. Running from 2021 to mid 2022.

APRA Deputy Chair Helen Rowell said Superannuation Data Transformation was “essential” to APRA’s focus on improving member outcomes.

“APRA is largely satisfied with the state of our MySuper data collection, but there are some areas that require enhancements; and we need to significantly upgrade the scope and granularity of our data on the choice sector. A lack of industry agreement in areas such as asset class definitions is also hampering the ability to make meaningful industry-wide comparisons, and this consultation seeks to provide clarity and consistency in these areas,” Rowell said.

“APRA will use the insights gained from a more complete and granular data collection to sharpen its supervision priorities and drive better industry practices. Heightened transparency will also intensify the pressure on underperformers to lift their game.”

Reviews called for APRA to improve data collection

The data collected by APRA about super fund has been the subject of recommendations by recent inquiries.

The Productivity Commission inquiry into the super system recommended APRA “embed product-level reporting within its reporting framework as soon as practicable (no later than 18 months) to enhance visibility of actual member outcomes across all APRA-regulated funds and to bring reporting for the choice segment into line with the MySuper segment. APRA should also expedite efforts to address inconsistencies in reporting practices.”

One of the recommendations of the APRA Capability Review was for APRA to “update its superannuation reporting standards and collect product level data that facilitates accurate assessments of outcomes and comparability across funds”.

First time Choice data to be collected and published

The Australian Institute of Superannuation Trustees (AIST) welcomed the announcement that, for the first time, data about Choice products would be collected and published by APRA.

“Choice super products have been subject to less scrutiny compared to default MySuper products, and many choice products, particularly those provided by the banks and other for-profit providers, perform poorly compared to MySuper products,” said AIST.

AIST CEO Eva Scheerlinck said the project is an “important step” towards high standards for all super funds.

“For too long choice super products have been subject to less scrutiny because of lack of data.”

“There are more than 40,000 choice super products available and the regulator has not been able to ensure they deliver good member outcomes because the regulator doesn’t have product-level data on their fees or performance.”

“Lesser scrutiny of choice products means members who leave the protection of the default super system have too often been left at sea, with no way of comparing the fees or performance of the choice product”

APRA has started Phase 1 with the release of a discussion paper, with a due date for submissions of 17 January 2020. The first release of data is expected in late 2020.

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