The inaugural MySuper Product Performance Test has been released as part of the Morrison Government’s Your Future, Your Super reforms.
The Australian Prudential Regulation Authority (APRA) assessed 76 of 80 MySuper products with at least five years of performance history against an objective benchmark taken over seven years. A total of 13 products failed to meet the objective benchmark.
More than 1.1 million Australians are members of those underperforming superannuation funds, which have a total $56.2 billion invested.
Each of those fund members will soon receive letters informing them of their fund’s poor performance. The letter will direct members to the online YourSuper comparison tool so that they can compare their fund’s performance with others and decide whether to switch.
The super funds that failed the benchmark test are:
- AMG MySuper
- Commonwealth Bank Group Super
- Energy Industries Superannuation Scheme-Pool
- Colonial First State FirstChoice Superannuation Trust
- Labour Union Co-Operative Retirement Fund
- Maritime Super
- BT Super’s Retirement Wrap
- ASGARD Independence Plan Division Two,
- Australian Catholic Superannuation and Retirement Fund
- The Victorian Independent Schools Superannuation Fund
- Boc Gases Superannuation Fund,
- AvSuper Fund
- Christian Super
The top 10 super funds by net return (assuming it is a 30-year-old person with a $50,000 balance) are:
- Local Government Super (now re-branded and known as Active Super, 9.46 per cent return)
- AustralianSuper (9.44 per cent return)
- HOSTPLUS Superannuation Fund (9.33 per cent return)
- AON Master Trust (9.14 per cent return)
- Goldman Sachs & JBWere Superannuation Fund (9.13 per cent return)
- UniSuper (9.01 per cent return)
- Construction and Building Unions Superannuation Fund (9 per cent return)
- Mine Superannuation Fund (8.86 per cent return)
- QSuper Lifetime (8.8 per cent return)
- Retirement Wrap Westpac Group (8.75 per cent return)
The reforms are designed to remove the poorly-performing super funds from Australia’s $3 trillion super system and help lower the high cost of fees. Excluding insurance premiums, Australians spend more than $30 billion in super fees every year, according to the 2019 Productivity Commission review into superannuation.
This is the first time that super funds’ investment performance has been made compared to a competitor, and if the underperforming funds get two consecutive failures, there will be a ban on that fund taking any new members until they improve.
The under-performing funds now have a choice: make the improvements needed to ensure they pass next year’s test or start planning to transfer their members to a fund that can deliver better outcomes for them.
Either way, this extra transparency of our retirement savings moving forward is good news for all Australians.
