APRA focused on retirement income performance data | Australian Markets

The Australian Prudential Regulation Authority (APRA) has signalled its intention to publish more comparative data on retirement product performance.

Despite the urgings of the Financial Services Council (FSC) to not search to increase the superannuation performance take a look at to retirement income merchandise, APRA deputy chair, Margaret Cole stated the regulator intends to offer additional insights on retirement product data over time, together with subsequent 12 months’s Comprehensive Product Performance Package.

Addressing a Canberra convention on retirement, Cole stated APRA is enhancing transparency in  retirement product performance data, noting that it just lately printed data on retirement part merchandise for the primary time captured the performance data for 600 multi-sector choices.

She stated this served to reinforce transparency of investment returns, charges and prices and investment methods at a product degree.

“As well as shining a light on the performance of individual products, we expect access to more detailed retirement product information will help foster greater competition and innovation among trustees,” Cole stated.

The APRA deputy chair additionally indicated regulatory concern in regards to the numbers of superannuation fund members nonetheless opting to take lump sums upon retirement.

Commenting on the need for superannuation funds to offer enough easy-to-understand details about the choices accessible to them and steerage on retirement planning, she prompt that almost all people weren’t adequately knowledgeable.

“Do most members approaching retirement have that confidence today? The answer would have to be a resounding ‘no’,” Cole stated.

“Members who make decisions absent support or information may not necessarily be acting in their own best financial interests. For example, a significant share of members draw down a lump sump from their super in part or in full at the point of retirement,” she stated.

“While there can be good reasons for making this decision, say to pay off a mortgage, and each individual’s circumstances are unique, there is also the potential risk of missing out on the compounding and tax advantages of keeping funds in the superannuation system in retirement.”