The government has conceded to industry demands on administration fees and unlisted assets’ treatment in the new APRA performance tests, as it finally releases draft regulation for the Your Future, Your Super reforms.
It has agreed to include administration fees to the new performance testing for funds, an omission that was panned by many participants.
The government has also added Australian unlisted infrastructure and unlisted property as specific asset classes in the performance tests.
“This will improve the accuracy of the performance test; strengthen the focus of the test on investment outcomes delivered to members; and ensure that Australian superannuation funds can invest with confidence in these domestic assets,” federal treasurer Josh Frydenberg and minister for superannuation and financial services Jane Hume said in a joint statement.
Both changes were welcomed by Industry Super Australia and the Association of Superannuation Funds of Australia (ASFA).
“Both changes in the proposed regulations released today need to be examined in further detail, but ISA is willing to work with the government on further changes to get the best outcome for members,” Industry Super Australia said.
ASFA chief executive Martin Fahy said: “Australian superannuation funds’ strategic asset allocation, including the significant allocation to unlisted investments, has been an important element in their outperformance compared to international peers.”
“…Including all fees in the proposed benchmark will help align the benchmark to the reality of the returns members see in their superannuation and help address any anomalies that different cost definitions might cause when comparing the performance of different products.”
The new consultation on the regulation released yesterday runs until May 25.