This is the final Policy News for 2022. From everyone at AIST, have a safe and enjoyable Christmas and a happy new year. Policy News resumes in late January.
Superannuation Policy News - 15 December 2022
APRA releases MySuper Heatmap
Superannuation fund members have saved an estimated $210 million as fees and costs have fallen for most MySuper products, according to the Australian Prudential Regulation Authority (APRA).
Releasing its 2022 MySuper Heatmap, APRA said 8.1 million members representing about 56% of accounts had benefitted from savings since the 2021 Heatmap was published.
APRA has also deferred the update of the data in the Choice Heatmap to 2023.
The Heatmap evaluates the performance of all MySuper superannuation products based on investment returns, fees and costs and long-term sustainability of member outcomes and includes each product’s result under the Annual Performance Test.
Other key findings:
- about 1.5 million member accounts with $51.6 billion in member benefits have been transferred to other products as 28 MySuper products have closed since the first heatmap was published in 2019
- About 800,000 accounts remain in MySuper products with a “significantly poor” investment performance but another 350,000 members left these products since 2021, and
- most superannuation funds have posted negative growth over the past three years across one or more of the heatmap’s sustainability metrics.
APRA Deputy Chair Margaret Cole said the superannuation industry needed to address serious sustainability issues with hundreds of thousands of members remaining in funds with sub-par investment performance.
“APRA expects that trustees with underperforming products will consider options to transfer members or otherwise restructure their businesses, particularly where sustainability pressures are significant,” Ms Cole said in a media release.
APRA has also published updates to FAQs on APRA’s superannuation heatmaps and Superannuation Data Transformation.
ASIC calls out super trustees over complaints handling
The Australian Securities and Investments Commission (ASIC) has put superannuation trustees on notice to improve their internal dispute resolution systems after a review found some trustees had sub-standard arrangements for managing complaints.
ASIC said Report 751 Disputes and deficiencies: A review of complaints handling by superannuation trustees outlined ASIC’s findings on compliance by a selection of trustees with the obligations in Regulatory Guide 271 Internal dispute resolution (RG 271).
ASIC selected 35 trustees for an initial review, followed by a more detailed review of 10 trustees.
“Superannuation fund members have a right to make complaints to their fund and to expect their complaints to be handled fairly and in a timely manner,” ASIC Commissioner Danielle Press said in a media release.
ASIC’s key concerns included:
- some trustees did not respond to a significant portion of complaints in a timely manner
- most trustees failed to ensure all complainants were kept informed when their response exceeded the maximum timeframe
- too many written responses omitted mandatory content related to a consumer’s right to take their complaint to AFCA
- there were gaps in how most trustees managed systemic issues that could be identified through complaints or how they used intelligence to improve products and services, and
- trustees’ internal reporting often lacked sufficient detail to identify, much less remedy, deficiencies in complaint handling.
ASIC was writing to these trustees, who would be required to take prompt action to remedy the issues and the majority would need to report on improvements made.
ASIC is also considering other regulatory action where more serious concerns were identified.
“I strongly encourage all superannuation trustees to critically examine their dispute resolution arrangements based on our findings, make timely improvements and ensure they are fit-for-purpose going forward,” Ms Press said.
Customer service in super industry is unacceptable - Jones
Minister for Financial Services Stephen Jones said the ASIC complaints management report showed that the level of customer service was unacceptable in the superannuation sector.
“It needs to be a wake-up call for the industry,” Mr Jones he said in speech.
“It shows customer service is unacceptable in a sector that should be completely member-focused.”
Too often he received letters from members of the public who believed their fund took them for granted.
“It is not good enough,” Mr Jones said.
The sector was on notice to do better and, with $150 billion contributed to superannuation funds over the last 12 months, answering the phone should be a “non-negotiable”.
“The customer experience needs to improve across the board. The Government and the regulators will take steps to lift the standards. And in a competitive marketplace, it is on the funds to be better,” he said.
APRA releases annual superannuation statistics
APRA has released the annual fund-level superannuation statistics and annual MySuper statistics for 2022.
They contain detailed profile and structure, financial performance and financial position, conditions of release, fees and membership information.
APRA-regulated funds with 30 June balance dates had total assets of $2.245 trillion in 21.5 million accounts at 30 June 2022, a reduction from $2.255 trillion in 21.2 million accounts at the same time of the previous year.
The data showed 14.45 million accounts had $881.275 billion in 70 MySuper options at 30 June 2022, compared to 14.23 million accounts holding $901.57 billion in 81 MySuper options at the same time last year.
APRA releases SDT forum notes
APRA has released the notes of the first Superannuation Data Transformation (SDT) Strategic Forum (SDTSF) on 22 November 2022.
The Forum was attended by representatives of APRA, ASIC, the Australian Bureau of Statistics and industry.
The SDTSF is an opportunity for industry stakeholders to contribute to the understanding and resolution of APRA's and industry’s challenges for the implementation of and transition to the new superannuation data collections.
APRA’s SDT project aims to drive better industry practices and improve member outcomes through heightened transparency.
The next forum will be held on 14 February 2023.
Enjoy more of AIST’s podcasts and webinars
For the second successive week we are bringing you a selection of our podcasts and webinars from 2022 for you to enjoy over the summer:
The increasing importance of natural capital for financial sector
Digital transformation for superannuation funds
CMSF panel discussion on 30 years of compulsory superannuation
Cognitive decline and the retirement system
Implementing a retirement income strategy
Retirement income supports and the welfare state
AIST’s weekly update on the status of legislation
Stay up-to-date on the current status of superannuation Bills currently before Parliament here.