The inclusion of administration fees and benchmarks for unlisted infrastructure and property investments headline amendments to the Your Future, Your Super draft regulation. While flaws remain in the design, most believe the performance test has been significantly upgraded.
Funds well ahead of the listed benchmark will have the luxury of continuing to focus on their CPI-plus or peer performance expectations and not be too concerned about the YFYS test in the near term, Frontier's Paul Newfield notes.
Australia’s $2.9 trillion of superannuation assets are becoming an increasingly powerful force for action on climate change, but experts are calling for a more holistic approach to equities that covers the entire value chain.
Some of the country’s largest funds have in some cases accrued more than nine-times the operational risk financial reserve requirement set by APRA with a handful of large funds bulking up their general reserves.
A reluctance or lack of appetite by the Australian Prudential Regulatory Authority for enforcement against underperforming superannuation funds has likely played a role in the creation of the Your Future, Your Super performance test, a Senate Committee has heard.
Strategies that have a lower alignment to the performance test benchmarks could become high risk for trustees as they could lead to failure of the test, over certain periods, despite longer-term outperformance, Mercer's Barlow points out.
Even in cases where remediation programs have begun or actions have been taken and where remediation is possible, regulators and government remain unclear about how trustees can direct funds to pay without impacting member balances, a House or Reps committee has heard.