Unit pricing was put firmly back on the agenda following parliament's recent review on the structure and operation of the superannuation industry.

The review, finalised last week, called for all public offer superannuation funds to adopt a uniform unit pricing model.

"Unit pricing is the most appropriate way to allocate investment earnings and appears to be the best way to ensure equity for members who move between funds," the committee report said.

According to research firm SuperRatings, about 67 per cent of superannuation funds used unit pricing, while 33 per cent used crediting rates. 

A crediting rate is calculated by crediting an amount to each person's account based on the overall rate of return on fund investments, as well as the amount invested by each person in the fund.

Unit pricing is the price of each unit based on the number of units issued and the total value of the fund investments at the time the price is calculated.

"We believe that daily forward unit pricing is best practice for the industry. All superannuation funds should look at moving towards such a model," SuperRatings managing director Jeff Bresnahan said.

Agest chief executive Michael Seton was more blunt. "Daily unit pricing is the only way to go. Crediting rates will not survive. We strongly endorse the committee's recommendation to move to an industry-wide unit pricing model" Seton told Investor Weekly. 

In 2007, the $2.6 billion public offer superannuation fund moved from crediting rates to daily unit pricing. Seton said the transfer was seamless and costs minimal.

"My view is that these days technology systems can calculate unit pricing. Cost is not an issue. Our administrator, Pillar, was able to cope with the changes. In the end the outcome was beneficial to our fund and our members love it," he said.

According to Seton, the choice of fund legislation, more investment options and the growth of rollovers made crediting rates ineffective.

"People can now switch funds or change their investment options and because crediting rates are calculated quarterly or annually, the timing of such decisions affect the value of their payments," he said.

Asset Super chief executive John Paul said his fund was looking at moving from weekly to daily unit pricing. However, he said such an approach should not become an industry standard.

"A standard industry model would not be practical. Superannuation funds vary in terms of their investments and the way they are allocated across their portfolios," he said.

Unit pricing does not come without its risks.

A joint ASIC and Australian Prudential Regulation Authority consultation paper in 2005 warned "errors in unit pricing systems may be undetected for long periods. There have been cases where preventable small errors in the calculation of fees, tax or transaction costs have accumulated over several years, ultimately affecting many thousands of unit holders".

Bresnahan, however, disagrees.

"It's not the perfect answer because there is no perfect answer, but it is the most equitable outcome for superannuation fund members," he said.