Following a response to a recent Productivity Commission report into superannuation, the Australian Prudential Regulation Authority (APRA) recently released the first results of it’s annual performance test that ranked 76 ‘MySuper’ (product) based on fees and returns. Sadly 13 of these 76 funds, including some Industry funds, failed the test with over 1 million people currently invested in one of the underperforming options.
The list of underperforming funds are listed below:
If you currently have your superannuation with one of these funds, then you will soon receive (or have already received) a letter from your fund advising you they have failed the test and to consider moving to a different superannuation product.
What Was The Test?
The test looked at the average performance for the last 8 years and fees for the last financial year and compared them to a benchmark portfolio and average fees for MySuper Products. If the combination of performance and fees results in a 0.5% or more underperformance, the fund will have failed the test.
If Your Super Fund Didn’t Pass The Test, What Should You Do?
If your super fund didn’t pass the test, there is no need to panic. Rather it should be used as a timely reminder that not all funds perform well and to assess if there are other funds or investment options that may better suit your personal and financial goals and objectives.
Some of the factors to consider would include:
- What is the performance over the long term (at least 3-5 years)?
- What are the fees
- Is it actively managed and adjusted based on market conditions or just set and forget?
- Do you have a clear overview of how your money is invested?
- What are the Insurance options?
Even if you did not receive one of the letters, it would still be worth reviewing your super fund.
