APRA begins super data transformation efforts

APRA is embarking on a multi-year project to improve the quality of its superannuation data collection that will pave the way for the proper comparison of super products, with choice super set to come under increased scrutiny.

Known as APRA's Superannuation Data Transformation, the program will see the prudential regulator enhance the comparability and consistency of the industry's reported data.

It will have a specific focus on the choice segment, which so far has not been subject to the same level of data collection as MySuper products.

Australian Institute of Superannuation Trustees chief executive Eva Scheerlinck said the move would finally allow members with choice superannuation products to understand where they sat compared to MySuper options.

According to Scheerlinck, the lack of data on hand has made the comparison impossible previously, even when members were in underperforming choice products.

"For too long choice super products have been subject to less scrutiny because of lack of data," Scheerlinck said.

"There are more than 40,000 choice super products available and the regulator has not been able to ensure they deliver good member outcomes because the regulator doesn't have product-level data on their fees or performance.

"Lesser scrutiny of choice products means members who leave the protection of the default super system have too often been left at sea, with no way of comparing the fees or performance of the choice product."

APRA said it collects data from 209 registrable superannuation entity licensees and Exempt Public Sector Schemes managing more than $2 trillion in assets for around 27 million member accounts.

However, the regulator admitted there was a difference between the quality of its MySuper and choice data.

"APRA is largely satisfied with the state of our MySuper data collection, but there are some areas that require enhancements; and we need to significantly upgrade the scope and granularity of our data on the choice sector," APRA deputy chair Helen Rowell said.

However, Rowell added that the industry needs to take some responsibility for the difficulties, noting its lack of agreement across areas such as asset class definitions had hampered the regulator's ability to make meaningful industry-wide comparisons.

APRA released a discussion paper to outline the scope, objectives and approach of the project, which Rowell hopes will provide "clarity and consistency" to areas of industry tension. She added that the program would allow APRA to "sharpen" its supervision priorities and drive better industry practices.

"Heightened transparency will also intensify the pressure on underperformers to lift their game," she said.

"The improved data collection will also support the implementation of other key regulatory requirements including the business performance review, and the legislated outcomes assessments which form a key input to these reviews.

"It also enables the planned expansion of our new performance heatmap to include choice products."

The project's consultation will be divided into three phases, the first of which will address breadth, the "most urgent" gap in the regulator's data collection.

APRA will respond to the first phase of consultation and finalise changes to its reporting changes by midway through next year, with the first tranche of data collected under Phase One due for publication by late-2020.

Scheerlinck said the AIST was pleased APRA had acted on its call for improvement, so the public could be "sure that for-profit providers aren't hiding behind lack of data to avoid regulation".

"We look forward to APRA addressing any underperformance identified through this enhanced data collection," Scheerlinck said.

Read more: SuperAPRAChoiceSuperannuationMySuperEva ScheerlinckHelen RowellAISTAustralian Institute of Superannuation Trustees
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