APRA ‘expects’ quarterly unlisted asset valuations by big super
Superannuation funds have been told to value the $650 billion in unlisted assets they hold quarterly, and more frequently during periods of market volatility or big policy change by governments.
Final guidance published by the prudential regulator on Thursday also requires the use of blackout periods around each revaluation period. This would prevent members moving into or out of unlisted investment options while they are being revalued.
It comes after the Financial Regulator Assessment Authority, run by former Macquarie chief executive Nicholas Moore, raised concerns about ensuring super savers get fair value when they switch investment options or withdraw money.
Debate is intensifying over the value of unlisted assets in superannuation funds. David Rowe
APRA launched a review of its guidance in the areas of unlisted asset valuations, stress testing and liquidity management following COVID-19, when markets plummeted, employer super contributions dried up in some industries and the government allowed early access to retirement savings.
The final version says funds are expected funds to “undertake valuations on at least a quarterly basis”. And if funds do not meet this best practice expectation they will need to explain why not.
The Australian Financial Review understands that while some funds such as UniSuper have recently updated internal policies to increase their valuation frequency to quarterly, most have at least some assets they only revalue every six or 12 months.
Debate about how often unlisted assets are valued, and their potential therefore to remain inflated even after listed assets have tanked, has flared after some funds revealed their returns had eroded by write-downs on office towers of as much as 15 per
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