By Ishan Dan
This article was originally published on The Inside Investor
As part of the Government’s ‘Your Future, Your Super’ (YFYS) reforms, all APRA regulated super funds will be submitted to a performance test on a yearly basis. The test has been derided by the industry but ultimately forces every fund to measure itself against the index or ‘average’ fund. Where is persistently underperforms it will be forced to contact members and if this continues, ultimately stop accepting new members.
On APRA’s first run, thirteen MySuper products have failed the APRA performance test.
What that means is that one million Australians are tied to underperforming default super funds. The funds will be forced to send a letter to the 1.1m members by the end of September encouraging them switch to a better fund.
In total, APRA looked at 76 MySuper products and assessed them against 5 years of performance history against a benchmark. They were graded as a ‘Pass’ or ‘Fail’. Some of the largest funds that did not pass are included in this list:
These include:
- 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
On the other hand +80 per cent of default super funds passed the test with flying colours. The top 10 performers by net return, assume a 30 year old with a $50k balance were:
- Active Super 9.46%
- AustralianSuper 9.44%
- HOSTPLUS Superannuation Fund%
- AON Master Trust 9.14%
- Goldman Sachs & JBWere Superannuation Fund 9.13%
- Unisuper 9.01%
- Construction and Building Unions Superannuation Fund 9%
- Mine Superannuation Fund 8.86%
- QSuper Lifetime 8.8%
- Retirement Wrap Westpac Group 8.75%