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APRA unveils MySuper heatmap
APRA has unveiled details of the superannuation heatmap it will publish next month as part of a suite of regulatory initiatives designed to improve member outcomes.
As outlined in a heatmap information paper released today, the heatmap uses a graduating colour scheme to provide clear and simple insights into MySuper products across three areas: investment performance, fees and costs, and sustainability of member outcomes. For investment performance and fees and costs, MySuper products delivering outcomes below relevant benchmarks are depicted from pale yellow to dark red. The sustainability measures provide an indication of a trustee’s ability to provide quality member outcomes in the future and address areas of underperformance.
In a media release out today, APRA said the ultimate purpose of the heatmap was to have trustees with areas of underperformance take action to address it. It warned trustees to expect its supervision intensity “to reflect the intensity of the colour shading of the heatmap”.
Speaking at today’s ASFA conference, APRA Deputy Chair Helen Rowell, stressed the heatmap was not designed to be used by members as their only source of information to make decisions about where to investment their retirement savings. “The heatmap tells an important story, but not the full story,” she said. “It provides a starting point for trustees to give further consideration to their MySuper Product performance and how to improve it.”
The full heatmap will be published on the APRA website by mid-December. In the meantime, APRA will hold industry webinars to further explain how the regulator intends to use and update the heatmap.
APRA clarifies PMIF insurance issues
APRA has moved to clarify insurance issues in the Putting Members’ Interests First Bill.
PMIF requires insurance to be provided on an opt-out basis for members with account balances below $6,000 or for new members under 25 years of age. This is in addition to opt-out insurance provisions of the Protecting Your Super Bill for members whose accounts have been inactive for more than 16 months.
APRA has released guidance and answers to nine Frequently Asked Questions about initial implementation of PMIF, ongoing guidance and the operation of the Dangerous Occupation Exception.
APRA has flagged the Governments intentions to amend the SIS Act to:
APRA has also issued a dangerous occupation exception election template.
For further details, please contact AIST senior policy manager, David Haynes at firstname.lastname@example.org
Senate to examine wage and super theft
The Senate Economics References Committee has been tasked with examining wage and super theft, following a series of high-profile cases in the media.
The Committee, chaired by Labor Senator, Alex Gallacher, will investigate the causes, extent and effects of unlawful non-payment or underpayment of employees' remuneration by employers.
The Committee will also consider measures that can be taken to address the issue, with particular reference to:
Industry consults on financial advisors’ Code of Ethics
AIST has provided feedback to the Financial Advisers Standards and Ethics Authority (FASEA) on the recently released Code of Ethics Guidance, which includes our concern about the provision of intrafund advice within the Code.
AIST attended a session with other industry associations to provide feedback on the practical elements of the Code. Key issues raised include:
AIST is particularly concerned about the provision of intrafund advice within the Code, which suggests that an adviser needs to always take into account a client’s broader and long-term future circumstances.
During the briefing, FASEA explained the integrated nature of the Code highlighting that the five values are paramount, and the standards are a way in facilitating these values. FASEA reiterated that the Code imposed ethical duties that go above the requirements in the law and is designed to encourage higher standards of behavior and professionalism in the financial services industry.
It was also highlighted that the guidance is an interpretation of the law and is not meant to be definitive because individual circumstances will vary. According to FASEA, the Code guidance is a living document and will be regularly updated.
FASEA is currently receiving written submissions on the Code Guidance until 22 November 2019. AIST will be making a written submission. If you have any questions of comments on the Code Guidance contact AIST Policy and Regulatory Analyst Zach Tung at email@example.com.
15 November 2019