ASFA welcomes the release of APRA’s performance test for super funds. The test highlights the continued strong performance of funds across the superannuation industry and their crucial role in securing Australians’ retirement outcomes.
Since the introduction of the performance test in 2021, the superannuation industry has made significant progress in improving returns for members. All MySuper products met or exceeded expectations in this year’s test.
There was a 100 per cent pass rate for MySuper products covering 15.7-million-member accounts and $1,082 billion in assets. There also was a 100 per cent pass rate for 3.9 million accounts and $366 billion in non-platform trustee directed products.
ASFA CEO, Mary Delahunty emphasised the key role the performance test has played in improving member returns by holding funds accountable for underperformance and enhancing transparency on MySuper products.
“The test has helped the superannuation system to realise its aim of ensuring that every Australian’s retirement savings are invested in products that outperform inflation and work to secure their retirements,” Ms Delahunty said.
“It is important to remember that superannuation is a long-term investment. We encourage fund members to look not just at annual returns, but also think about a fund’s long-term strategy before making any decisions about switching. Changing funds when they don’t meet your expectations over a short period can result in selling assets at a loss, potentially missing out on future recovery and gains. We recommend discussing any decisions with your financial adviser,” Ms Delahunty said.
ASFA recognises the collective efforts of retail, industry, corporate, and public sector funds in championing the fund performance required by the test.
“Funds from all sectors have delivered impressive returns; several have gone well into double digits. This is testament to their professionalism and their dedication to the future financial wellbeing of their members,” Ms Delahunty said.
While it has proven effective thus far, ASFA cautions that the performance test in its current iteration does not capture every aspect of fund performance.
“While the performance test has been useful in improving fund performance, we also acknowledge that it’s a tool that considers a very limited range of indicators. Some members may choose to pursue strategies that will likely underperform in the short-term, while anticipating long-term outperformance. This is especially relevant to ethical or green investment strategies.
“We call for further refinements to the test to ensure it fully reflects the diverse strategies employed across the industry, so that we are able to both maximise choice for members and secure their long-term retirement goals,” Ms Delahunty concluded.
For further information, please contact ASFA Media team: 0451 949 300
About ASFA
ASFA, the voice of super, is the peak policy, research and advocacy body for Australia’s superannuation industry. It is a not-for-profit, sector-neutral, and non-party political, national organisation. ASFA’s mission is to continuously improve the superannuation system, so all Australians can enjoy a comfortable and dignified retirement.