The prudential regulator will write to the trustees of a number of MySuper funds that are “seriously underperforming” on fees, after it emerged the vast majority of funds have not lowered their administration costs since the introduction of APRA’s heatmap.
In a statement released on Tuesday, APRA said since the introduction of the heatmap in December – which aimed to benchmark fund performance and fees – super fund administration fees had "largely remained static or risen slightly, while the majority of funds that underperformed on fees and costs in the December 2019 heatmap continue to have relatively high fees".
An insights paper released alongside the updated heatmap data showed that 76 out of 90 MySuper funds had kept their administration fees the same since December 2019. Out of the 14 MySuper products that had altered their fee structure, 10 of these had increased fees.
APRA deputy chair Helen Rowell said the regulator was intensifying its supervision of underperforming funds.
"APRA is writing to the trustees of more than a dozen MySuper products that continue to seriously underperform on fees," Ms Rowell said.
"The letter will put these trustees squarely on notice that APRA is seriously considering its response to their failure to swiftly address these issues. Any response may include formal enforcement action.
"Superannuation trustees have a legal duty to promote the financial interests of their members. With access to APRA’s updated heatmap, as well as their member outcomes assessments and business performance reviews, trustees have no excuse for not understanding how well they are achieving this in comparison to their peers."
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