Superannuation heatmaps frequently asked questions

The heatmaps supports the performance test by providing additional insights across multiple dimensions and by providing a detailed data set for users to explore. 

The performance test is a single metric, whereas the heatmap provides a range of metrics over different periods so that users can compare the performance relative to a number of benchmarks and over different time horizons.

The MySuper Heatmap includes two columns to show whether a MySuper product passed or failed the annual performance test and the product’s numeric result for the annual performance test. The performance test results are located to the left of the investment returns metrics in the MySuper Heatmap.

Yes. The MySuper Heatmap includes all MySuper products (both single strategy and lifecycle products) offered by RSE licensees at the fees and costs “as at” date of the MySuper Heatmap.

Useful information for consumers seeking to better understand superannuation can be found on the Australian Securities and Investments Commission’s MoneySmart website.

The MySuper Heatmap uses data reported by RSE licensees under mandatory reporting obligations, which are required to be of high quality and accurate. APRA also requires RSE licensees to promptly address data anomalies identified and weaknesses in their data management frameworks.

APRA regularly engages with external specialists to assist with specific projects such as the development of the Heatmap and its Superannuation Data Transformation Program.

The following consultants were engaged to assist with the initial development of the 2019 MySuper Heatmap:

David Bell - APRA engaged David Bell in a consulting-style capacity during the development of the MySuper Heatmap. In this capacity David reviewed and provided observations and suggestions on APRA’s proposed heatmap metrics relating to investment returns.

Deloitte - APRA retained Deloitte in the early stages of the MySuper Heatmap development through a short-term consulting engagement. In this engagement Deloitte reviewed and provided summary observations on APRA’s initial proposed metrics and high-level methodology used in two areas - specifically investment returns and fees and costs.

• No formal opinion or report was provided by Deloitte to APRA. Deloitte provided observations to APRA for the purpose of informing APRA’s further work on the heatmap. Deloitte was not engaged and did not review the final versions of the MySuper Heatmap metrics, methodology or reporting as launched by APRA.

Rice Warner – APRA retained Rice Warner in the MySuper Heatmap development through a short-term consulting engagement. In this engagement Rice Warner reviewed and provided summary observations and feedback on APRA’s proposed metrics and high-level methodology. Rice Warner also reviewed draft calculations of the metrics in the heatmap and provided observations on the application of the methodology and on the interpretation of the data used as inputs to the methodology. 

• No formal opinion or report was provided by Rice Warner to APRA. Rice Warner provided observations and feedback to APRA for the purpose of informing APRA’s further work on the heatmap.

The BRAFE used for the 2021-22 performance test was 0.25948%. 

The 2022 MySuper Heatmap has been re-issued to ensure that the correct international index data is reflected in the relevant investment metrics. 

Yes, the correct international index data was used in all MySuper heatmaps in relation to previous years.

Yes, the 2022 MySuper Heatmap Excel file includes a ‘Revisions’ tab, which details the affected items and the original and revised values.

No. All performance test determinations that were issued in August 2022 are unaffected.

APRA expects RSE licensees to reflect on their performance in the Choice Heatmap, undertake analysis to assess the drivers of poor performance and take prompt action to improve performance. APRA expects this analysis will be reflected in the RSE licensee’s annual outcomes assessments and business performance review.   

As a wide range of investment options may be offered within different Choice products, investment options in the Choice Heatmap have been categorised into one of six growth asset allocation categories (0%-40%, 40%-60%, 60%-75%, 75%-90%, 90%-100%, and >100%) to enable comparison of similar investment options. 

Superannuation members can access Choice investment options through different superannuation products and investment menus, which may involve different fee and cost structures and different return outcomes. The terminology “investment pathway” is used in the Choice Heatmap to describe each of these unique combinations of superannuation product, investment menu and investment option. 

The Choice Heatmap covers investment pathways that: 

• have a ‘standard’ fees and costs arrangement, as reported in SRS 605.0 RSE Structure; 

• are available through accumulation products; 

• are available through generic investment menus, rather than platform investment menus; and 

• are ultimately invested in Multi Sector options, as reported in SRS 605.0 RSE Structure. 

The heatmap includes investment pathways that are open to new members as well as those that are closed to new members (but have existing members). 

APRA has made limited changes to the methodology supporting the heatmap metrics or thresholds from those published in 2021 as outlined in the Methodology Paper. Most of these changes arise due to the use of APRA data from the Superannuation Data Transformation collection. 

Changes in methodology for the Choice Heatmap include: 

• No colouring graduation applied to Total Fees and Costs Disclosed metrics. These metrics may be significantly affected by investment fees and costs disclosed at the underlying investment option level. There is a wide variety of investment strategies applied by different investment options in the superannuation sector, and reasonable levels of investment fees and costs may vary widely across these different types of investment strategies.   

• Use of strategic subsector and strategic sector asset allocation (SAA) data. Where available from SRS 550.0 Asset Allocation, SAA data reported at the strategic subsector level has been used instead of strategic sector level data to ensure the most representative SAA data is used. 

• No net return metric for investment pathways. For most of the in-scope investment pathways in the heatmap, net investment return is reported on SRS 705.1 Investment Performance and Objectives rather than net return. APRA has not attempted to apply adjustments to estimate a historic net return for investment pathways. 

• Calculation of fees and costs metrics. The adoption of SRS 706.0 Fees and Costs has required some modifications to the specific formulae used to calculate these metrics. Key changes include the use of a ‘Standard’ Fees and Costs Arrangement, the treatment of fee tiering arrangements, and the inclusion of ‘Fees and Costs Component Activity Type = Advice’ as administration fees (in accordance with ASIC Regulatory Guide 97 provisions). 

• Assets and member accounts columns. These columns are now shown at the investment pathway level rather than at the RSE level, except where numbers are masked in line with privacy provisions.   

The total fees and costs metrics may be affected by investment fees and costs disclosed at the underlying investment option level, because of the particular investment strategy being targeted. As there is a wide variety of investment strategies across the Choice product population, colouring total fees and costs may be misleading.  While APRA is no longer colouring total fees and costs, APRA continues to believe it is useful to continue to publish these specific metrics as they are important in the overall consideration of product performance.  

The Choice Heatmap utilises asset allocation, investment return and fee data provided to APRA by regulated RSE licensees. Superannuation RSE licensees are responsible for ensuring they report accurate data to APRA. 

While APRA has taken reasonable steps to ensure the accuracy of metrics in the Choice Heatmap publication and has actively sought to liaise directly with entities where potential data quality concerns have been identified, we are ultimately dependent on data provided by RSE licensees. Data collection for superannuation Choice products is still relatively new and will continue to improve as reporting requirements are embedded across the industry. 

The heatmaps enable like-for-like comparisons of outcomes being delivered to members in MySuper products and certain Choice investment pathways, in the key areas of investment returns, and fees and costs. The heatmaps also provide growth trends for an RSE licensee’s business operations, which are relevant to assessing the sustainable delivery of member outcomes.

The heatmaps seek to foster a focus on continuous improvement across the superannuation industry by providing clear, credible and useful insights into the outcomes delivered to members.

The heatmaps use colour to show how well a MySuper product or Choice investment pathway is delivering appropriate outcomes for its members, relative to its peers and benchmarks.

• When looking at investment returns, any product or pathway that is performing above a determined benchmark is coloured white. A colour gradient from pale yellow to crimson has been used for products and pathways that are performing below that benchmark.
• For fees and costs, the colours have been applied slightly differently. Products with lower fees are coloured white through to amber and those with higher fees are coloured amber through to red.
• For sustainability of member outcomes, products are coloured either white or amber, with amber indicating areas of concern that require further investigation to ensure appropriate member outcomes can continue to be provided into the future.

Importantly, APRA is not providing an overall assessment of each product based on all the metrics. Each MySuper product and Choice investment pathway is assessed against each metric; a range of measures is necessary to assess performance outcomes. The heatmaps do not currently include measures of the value or performance of insurance offered, or the quality of other features such as member services.

The heatmaps are not intended to be used in isolation when making decisions about where an individual member directs their retirement savings. They are designed to enable like-for-like comparisons of outcomes being delivered by every MySuper product and certain Choice investment pathways in the key areas of investment returns, and fees and costs. The heatmaps do not currently include measures of the value or performance of insurance offered, or the quality of other features such as member services.

The heatmaps are not a substitute for independent professional advice. Useful information for consumers seeking to better understand superannuation can be found on the Australian Securities and Investments Commission’s MoneySmart website.

Members who wish to compare the investment performance or fees of MySuper products can also use the YourSuper comparison tool.

White (or absence of colour) indicates a MySuper product or a Choice investment pathway has been performing above benchmarks for investment returns and fees and costs. It doesn’t mean there is no room for improvement for the MySuper product or Choice investment pathway. Further, past performance is not a guarantee of future performance.

The heatmaps are not a substitute for independent professional advice. The heatmaps are not intended to be used in isolation when making decisions about where an individual member directs their retirement savings.

A MySuper product or Choice investment pathway that is ‘orange’ or ‘red’ on a particular metric in the heatmaps indicates that it has performed poorly against a benchmark for investment returns and fees and costs. A MySuper product or Choice investment pathway with mostly orange / red indicates that APRA has concerns.    

Members could consider the Australian Tax Office’s YourSuper comparison tool, which incorporates the findings of the MySuper performance test. Useful information can also be found on the Australian Securities and Investments Commission’s MoneySmart website, for members seeking to better understand superannuation.

In addition, it is important to understand the actions RSE licensees are undertaking (or going to take) to address the areas where they are underperforming. Details contained within the Annual Outcomes Assessment and Annual Report, or discussed during Annual Members’ Meetings, may be helpful.

Sustainability of member outcomes refers to the RSE licensee’s ability to continue delivering good financial outcomes to members into the future, and/or address areas that require improvement.

In an industry where retirement outcomes are delivered over decades, RSE licensees must be able to deliver quality outcomes over the long term if they are to truly safeguard their members’ best financial interests.

Grey cells generally indicate insufficient or incomplete historical data due to investment returns and/or asset allocation data not being submitted to APRA. This data is required to produce the relevant metrics (including for the colouring of net investment returns relative to peers). 

APRA intends to publish both the MySuper Heatmap and Choice Heatmap on an annual basis, with additional updates as deemed necessary.

Users can provide feedback on any aspect of the MySuper Heatmap and Choice Heatmap by emailing DataAnalytics@apra.gov.au.

The heatmaps use data reported to APRA by RSE licensees under the Financial Sector (Collection of Data) Act 2001 as set out in the following table: 

The population for the updated MySuper Heatmap is based on data for MySuper products collected under Reporting Standard SRS 001.0 Profile and Structure. The population for the Choice Heatmap based on data for in-scope Choice investment pathways, collected under Reporting Standard SRS 605.0 RSE Structure.

For the ‘investment returns’ and ‘sustainability of member outcomes’ metrics, are based on data for historical reporting periods up to 30 June 2022. ‘Fees and costs’ metrics are based on data as reported at 1 October 2022.

APRA has considered the merits of both approaches and has determined that using the strategic asset allocation is appropriate for the following reasons:

• The strategic asset allocation considers the RSE licensee’s board-approved investment strategy: measuring actual returns against the RSE licensee’s strategic intent (i.e. the strategic asset allocation target) enables measurement of the RSE licensee’s asset allocation decisions (for example whether decisions to overweight or underweight certain asset classes have added value).
• Actual asset allocation is inherently unstable and is affected by market movements: using actual asset allocation to construct the benchmark portfolios will only measure a product’s return relative to asset class benchmarks i.e. value added or detracted from asset class implementation only.

This approach was validated and supported by the external consultants engaged by APRA in 2019.

There are multiple ways of investing in infrastructure and property assets, for example through listed vehicles (e.g. REITS) or through unlisted investments (e.g. the direct purchase of property). The method of investing in these assets has an impact on the types of exposure provided. Listed investments typically have a high correlation with equity investments and therefore offer limited protection in the event of an equity market downturn. APRA has accordingly classified these assets as 100% growth.

While unlisted real asset investments are sensitive to economic conditions, they also demonstrate some characteristics associated with defensive assets, such as income generation. To account for the slightly more defensive nature of unlisted assets, APRA has categorised these assets as 75 per cent growth and 25 per cent defensive.

No. Index level data are subject to confidentiality under the terms of the licensing agreements with the index providers.

The heatmaps consider investment risk associated with exposure to growth assets and certain asset classes. This is achieved by:  

• classifying investment pathways into one of the six growth asset allocation categories in the Choice Heatmap;  

• adjusting the Simple Reference Portfolio to match the total exposure of growth assets for each MySuper product or Choice investment pathway; and 

• adjusting the Strategic Asset Allocation benchmarking portfolio to match the strategic asset allocation of each MySuper product or Choice investment pathway. 

APRA is committed to the continuous improvement of its heatmaps and welcomes feedback from the industry.