The Australian Prudential Regulatory Authority (APRA) does not collect statistics on superannuation funds implementing daily unit pricing nor has guidelines for funds on appropriate crediting rate procedures.
At a recent Senate Estimates hearing APRA said it did not gather information on funds implementing daily unit pricing because it is not a prudential matter.
“You could almost say they are flying blind if they’re not really sure of what percentage of funds, whether retail or industry funds, are implementing daily unit pricing,” Tasmanian Senator David Bushby told InvestorDaily.
APRA has issued guidelines on daily unit pricing however it has no appropriate guidelines for funds that offer their members crediting rates.
Putting in place crediting rate guidelines would assist funds and ensure equity of outcomes for all investors, according to Bushby.
“An investor who leaves a fund that does not daily unit price at a time when asset values are falling could disadvantage the members who remain,” he said.
“We’re talking about a lot of money that people pay regularly but don’t think about a lot. If you don’t have somebody making sure it’s being done right the average investor won’t and they’ll just accept what they’re told,” he said.
There is always the issue of equity between members when individuals enter and leave a fund, APRA deputy chairman Ross Jones said at the hearing.
“The equity issue with all these things is the valuation of assets, so when we do our supervision we look at the way in which these things have been evaluated.” Jones said.
