13 superfunds fail APRA’s new MySuper test

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Out of 80 MySuper products assessed last month, 13 failed to meet the Australian Prudential Regulation Authority’s (APRA) objective benchmark.

The regulator carried out the ‘MySuper Product Performance Test’ as part of the federal government’s Your Future, Your Super reforms. The results have just been released this week.

APRA Executive Board Member Margaret Cole said, “It is welcome news that more than 84% of products passed the performance test, however APRA remains concerned about those members in products that failed.”

The review or ‘test’ itself has two parts: the first part assesses how a superfund’s investments are performing, while the second part reviews admin fees charged in the previous financial year and assesses them against the median fee charged for each category of a product. 

Superfunds are marked as either performing, underperforming or not assessed. Those marked ‘not assessed’ are super products with less than five years of performance history. Check out the YourSuper comparison tool to view the results of the assessment.

As well as showing whether a superfund is performing or not, the comparison tool also allows users to compare annual fees and the fund’s seven year net return. You can use the comparison tool search bar to look for your current superfund and see how it has fared.

What happens next?

According to Cole, trustees of the 13 superfunds that failed the test now face an important choice: they can urgently 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.

Superannuation companies managing the 13 failed products will be required to contact members by 27 September 2021 to inform them of the performance test result. If a superfund fails APRA’s test two years in a row, the superannuation company may be prohibited from signing new beneficiaries up to that fund.

Cross referencing results

Of course while financial performance is important, there are other factors that may be equally as important to many. The ethics of a particular superfund is a good example. 

A superannuation fund may perform well and have low fees, but you may not agree with what it invests in. If this is the case, one way to find a superfund that both performs well and aligns with your values is to cross reference the results from the YourSuper comparison tool with other resources. You can find a list of resources to check out about more ethical superfunds in our recent piece on switching to a green super.

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