Australia to publish pension fund ratings, pressure underperformers
By Paulina Duran
SYDNEY, March 13 (Reuters) - Australia will begin publishing
"heat maps" of the performance of pension funds next year and
will pressure those with poor records to exit the industry, the
Australian Prudential Regulation Authority (APRA) said on
Australian pension funds manage A$1.7 trillion ($1.20
trillion) in savings but lack "maturity" in governance and risk
management practices, APRA Deputy Chair Helen Rowell said in a
speech published on the regulator's website.
The sector is under pressure to lift standards and improve
accountability following a public inquiry last year which
exposed widespread misconduct in the financial industry.
"APRA will deliver greater transparency on the industry’s
operations, performance and delivery of outcomes, and also on
the actions we are taking to lift behaviour and practices across
the industry," Rowell said.
"We expect to begin making public our view of fund
performance at a more granular level – our heat maps, if you
The data would include performance metrics for individual
retirement funds and their products, encompassing investment
performance, fees and costs, insurance, and sustainability, she
Insights would be harnessed from the data to identify
underperforming funds and products, and the entities responsible
for them would be targeted with intensified supervision.
"If trustees are unable or unwilling to respond
appropriately, we will be urging them to seriously consider
whether restructuring or exiting the industry is in their
members' best interests," Rowell said.
The powerful independent inquiry known as a Royal Commission
took aim at regulators such as APRA as well as trustees and
publicly listed financial firms, saying the watchdogs too often
were reluctant to take wrongdoers to court.
Rowell said it was a "pity" that a bill to boost APRA's
powers had not yet been passed by parliament, adding: "Our
ability to compel action is more limited than we would like."
"But we will be using whatever tools and powers we have to
get action," she said.
The government has said it will act on the inquiry's
recommendations, which included steps to ensure APRA worked more
closely with the corporate regulator, the Australian Consumer
and Investment Commission, to seek civil penalties for trustees
that do not act in the best interests of their clients.
($1 = 1.4166 Australian dollars)
(Reporting by Paulina Duran; Editing by Stephen Coates)
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