APRA released details of the superannuation heatmap that will provide insights into the outcomes being delivered by the registrable superannuation entity (RSE) licensees by providing information for all MySuper products. Delivering an address to the ASFA 2019 conference in Melbourne, APRA Deputy Chair Helen Rowell revealed a sample of the heatmap. APRA also released an information paper that explains how APRA selected the metrics and benchmarks used in the heatmap and the methodology used to take into account differences in products’ investment strategy and asset allocation. The full heatmap is expected to be published on APRA website by mid-December.
The heatmap enables like-for-like comparisons of outcomes and seeks to foster a culture of continuous improvement across the superannuation industry. The heatmap is expected to drive improvements in outcomes for members by holding RSE licensees publicly accountable for their performance and by highlighting areas of under-performance. A heatmap with mock data is also available to illustrate how the heatmap will use a graduating color 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 the 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 under-performance.
APRA is integrating the heatmap into its risk assessment and supervisory intensity model, which is aligned with its new enforcement approach. In developing the heatmap, APRA has included metrics that reflect outcomes relative to peers and appropriate benchmarks. APRA will periodically refresh the heatmap to incorporate new data submitted to APRA. As work on assessment of member outcomes evolves, APRA will also develop metrics for insurance, as this is another important component of member outcomes. Having released the information paper, APRA will engage with trustees to ensure that both the heatmap and the APRA expectations for its use are well-understood. This will include meeting with trustees that the heatmap identifies as having clearly under-performing MySuper products and ensuring that these trustees deliver on plans to address this issue in a timely manner.
Keywords: Asia Pacific, Australia, Insurance, Pensions, Superannuation, Heatmap, Mysuper Product, RSE Licensee, APRA
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