APRA has published its annual superannuation statistics publications for 2024. For the first time and going forward, these publications now include fund-level expenditure data and insurance data – with the aim of increasing transparency, accountability and competition for superannuation funds, with a view to improve member outcomes.
What the new expenditure data includes
The new dataset contains fund-level expenses provided as a dollar amount, with some expenses expressed as a ratio against cash flow adjusted net assets. Some categories of expenditure provided in the data include:
- Administration and other operating expenses;
- Investment management expenses by type;
- Advice expenses by type;
- Promotion, marketing and sponsorship expenses;
- Industrial body payments;
- Political donations;
- Director and executive remuneration;
- Related party payments;
- Expense margin contribution to related service provider profit (including the name of the payee); and
- Expenses with promoters (including the name of the payee)
What the new expenditure data means
The release of the expenditure data by APRA follows its message in October 2024 to RSE licensees that APRA will:
“intensify its scrutiny of fund-level expenditure to hold RSE Licensees accountable to improve practices, reduce spending that is deemed to not be in members’ best financial interests and promote the financial interests of their members.”[1]
Discretionary expenditure categories such as travel, entertainment and conferences; as well as particular types of payments where benefit to members is not immediately apparent, are noted as high on the priority list for APRA’s main areas of focus.
This increased level of data published by APRA means that super funds will need to be able to demonstrate that past and future expenses were and will continue to be made in the best financial interests of members. This will require continued use of appropriate metrics, monitoring and documentation to avoid scrutiny.
A benefit of this new data published by APRA is the enablement of superannuation funds to be able to compare themselves against others and perhaps to follow the example of the low-expenditure funds, to improve member outcomes.
What the new insurance data includes
APRA has also released new fund-level insurance data for the first time providing insight into the life insurance, total and permanent disability income insurance, income protection, and other forms of coverage being offered by funds. The data includes claims information, insurance coverage and premiums, as well as member engagement metrics, all broken down by the insurance product type.
Super funds will be able to see how their claims, premiums, insured member counts and member engagement statistics compare to those of other funds in the industry in a centralised format. This could help to identify which funds are performing well and which may need improvements, allowing funds to follow the example of industry leaders to enhance outcomes.
In addition, super funds and insurers will now more easily be able to see which insurers are providing insurance for other funds and compare the level of engagement experienced under different insurers, which may provide valuable insights for funds while tendering or as an internal performance metric.
Conclusion
It remains to be seen whether this data will be used as a recording and transparency tool primarily, or for calls to action against super funds who appear to be recording more expenditure than others. In any case, the updates to these data publications are a positive step towards higher levels of transparency, accountability and competition, ultimately benefiting members of Australia’s superannuation industry.
Sankarshan
Sankarshan Muralitharan is a senior actuarial analyst at McGing and provides a wide range of services for superannuation, insurance and other financial services entities.