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APRA to ramp up super data collection for greater transparency

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The prudential regulator is proposing to enhance its data collection in areas such as trustee board governance and investment valuation and liquidity management.

The Australian Prudential Regulation Authority (APRA) has outlined its plan to improve transparency in superannuation through the collection of additional data from trustees.

In a discussion paper released on Thursday detailing the second phase of the regulator’s ongoing superannuation data transformation, APRA proposed to strengthen its data collection in areas like trustee board governance and investment liquidity and valuations.

“Deeper and richer data from trustees will significantly enhance APRA’s ability to improve industry transparency, governance and practices, and ultimately lead to better outcomes for members,” commented APRA deputy chair Margaret Cole.

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“In developing these proposals, APRA has sought to minimise regulatory burden on industry by requesting data that trustees already hold. We have also worked closely with peer agencies with the goal of ‘collect once and share’ where feasible.”

APRA’s superannuation data transformation was originally launched in November 2019 with the goal of improving the breadth, depth, and quality of its super data collection.

The first phase, “breadth”, resulted in greater transparency in the choice product sector, insurance outcomes, and in how super trustees are using their members’ funds.

Under the next phase, “depth”, APRA said it is planning to collect data needed to further support its supervision of the super industry across a number of different areas.

This includes new and enhanced investments data, including data to inform assessments of investment governance and exposure to liquidity and valuation risk.

The regulator said it will also seek enhanced data on the business model and structure of trustees, trustee boards, and board committees “to provide greater insights into the governance practices and effectiveness of superannuation trustees”.

Additionally, it will seek additional data to provide a more detailed understanding of product distribution arrangements between funds and intermediaries such as employer sponsors and promoters, as well as complex product features such as life cycle strategies.

Furthermore, APRA will seek data on total annual indirect investment costs associated with investment managers as well as trustee financial statements data.

APRA noted that it is planning to hold industry workshops to further refine its plan prior to finalisation and will also invite a sample of trustees to participate in a pilot study.

“We look forward to consulting with industry on the proposed collection,” Ms Cole concluded.

Enhancing transparency

As part of a panel discussion at the Association of Superannuation Funds of Australia (ASFA) Conference on Thursday, APRA executive director of superannuation Carmen Beverley-Smith noted that enhancing transparency in super is an ongoing focus for APRA.

“Trustees, collectively, steward $3.5 trillion of member assets and it is appropriate that the community has good visibility of how this substantial pool is being managed and invested,” she said.

Ms Beverley-Smith said that the annual super performance test and APRA’s heatmaps have “significantly enhanced the transparency of fund product performance – and more particularly, underperformance” in MySuper products and trustee directed products (TDPs).

On Wednesday, the prudential regulator published an insights paper which revealed that more than half of all platform TDPs failed to meet their investment benchmarks.

According to Ms Beverley-Smith, the second phase of APRA’s Superannuation Data Transformation represents another step towards enhancing transparency.

“APRA seeks to publish as much of the data we collect as possible to further increase transparency. We’re currently consulting with industry on how we publish total fund expenditure and expanded asset allocation data by mid-2024,” she continued.

“Members are entitled to expect access to comparable, quality information about their funds’ performance, expenditure, and governance. This information will substantially enhance visibility of how members monies are spent and invested.”

APRA to ramp up super data collection for greater transparency

The prudential regulator is proposing to enhance its data collection in areas such as trustee board governance and investment valuation and liquidity management.

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Jon Bragg

Jon Bragg

Jon Bragg is a journalist for Momentum Media's Investor Daily, nestegg and ifa. He enjoys writing about a wide variety of financial topics and issues and exploring the many implications they have on all aspects of life.

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