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- The Australian Prudential Regulation Authority (APRA) urges Australians to take a more active interest in their super accounts to maximise their retirement futures
- This comes after APRA found only seven per cent of workers tied to underperforming super funds closed their accounts and moved to a more favourable super product
- In August, APRA revealed the results of a MySuper performance test that found 13 of the 76 super funds assessed failed to meet an objective benchmark
- The funds that failed the test were required to write to members informing them of the lacklustre performance, but only a handful of members acted on the news
- APRA says it will next month release a “Choice Product Heatmap” to offer clear, credible, and comparable insights on the performance of a large portion of the super market
The Australian Prudential Regulation Authority (APRA) has urged Australians to take a more active interest in their super accounts to maximise their retirement futures.
The call comes after a performance test for MySuper products found in August roughly one million member accounts were tied to underperforming superannuation products.
The accounts came from 13 of the 76 MySuper products assessed in the APRA performance test.
However, upon being notified of the test outcome, only seven per cent of workers closed accounts with the lacklustre funds and moved to a better-performing super product.
APRA said it was still early days since the workers were notified of their super’s failure in the performance test.
Nevertheless, APRA executive board member Margaret Cole said while the regulator was working with the trustees of the failed products to make sure they improved their performance, that wasn’t a reason for members to avoid taking steps to act in their own best financial interests.
“Research shows that the difference in outcomes between a top product and an underperforming one can amount to hundreds of thousands of dollars over a working life,” Ms Cole said.
“The vast range of products and options on the market can make the idea of trying to choose a new fund seem overwhelming, but there has never been more information available to consumers to help them make informed decisions about their super.”
To help with choosing a strong super product, APRA said it would next month release a “Choice Product Heatmap” to offer clear, credible, and comparable insights on the performance of a large portion of the super market.
The super performance test
The APRA’s MySuper Product Performance Test was taken on as part of the government’s Your Future, Your Super reforms.
Essentially, the program tested 76 MySuper products with at least five years of performance history against an objective benchmark.
Of the products tests, 13 failed to meet the benchmark and were subsequently required to write to members informing them of the outcome of the performance test.
“Trustees of the 13 products 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 for them,” Ms Cole said ta the time.
While the 13 super products accounted for one million member accounts, only 68,000 people acted on the news of the failed performance test, shifting some $2.2 billion in assets away from the underpeforming funds.
