More and more is being said about Business Performance Reviews for super funds. Regardless of what the super industry thinks of APRA’s approach, it’s here to stay. The key to the Your Future, Your Super transparent reporting requirements is to ensure trustees set strategies and deliver against those benchmarks. If funds aren’t delivering they need to change their approach.
So, bearing this black and white regulatory definition it’s important to acknowledge there will be short term expenditure for long-term benefits here. However, these must be evaluated with a cost benefit analysis in mind. The eventual lowering of costs and fees may not be the only objective for any fund and other factors may need to be considered.
We recommend that super funds currently take a simplistic and high-level approach to planning and remain focused on what the long-term benefits to fund members are. The first action for funds is to ensure they determine whether the current offerings are in the best interests of members. Then establish the cohorts as a first step and simplify this as much as possible. Consider age and product cohorts and liaise with APRA to ensure these are suitable and your approach is reasonable. And remember if your performance doesn’t meet benchmarks then this gives you a transparent and clearly understood baseline to explain your underperformance. Key to all of this is to act on your findings internally in the business – now is not the time to delay remediation.
This is one of the most significant and supported regulatory superannuation initiatives over the past few years. Being confused about any elements of this as it applies to funds of all sizes is not an excuse for delay.