Retirees’ super at risk

Australian retirees have been left out of APRA’s quality test of super funds for the fourth year running. This failure to test products is leaving retirees in the dark about whether super funds are managing their money appropriately.

Today’s test results covered 19.8 million member accounts worth $1.47 trillion. The performance test is now in its fourth year of operation, but continues to leave out the 1.3 million accounts of retirees worth $451 billion from testing. 

“Retirees deserve to know if their super investments are good value for money,” says Director at Super Consumers Australia, Xavier O’Halloran. 

APRA has collected data on historical performance of retirement account-based pensions since 2022, but has not published this data. Account-based pensions are similar investments to the MySuper and trustee-directed products that are tested each year, but they are not currently tested.

“APRA has been sitting on this data for several years while retirees languish in accounts serving up high fees and poor performance. We are calling on APRA to release the data before the end of the year so that Australian retirees can avoid poor performing super products,” says O’Halloran.

Since the performance test started, it has driven 18 poorly performing MySuper options out of the system, which ensures 1.4 million accounts will achieve better outcomes during the accumulation phase. Another 37 failing products with 17,000 accounts worth $1.8 billion were called out today. These funds need to improve these failing products or move members into better alternatives.

“The performance test has been a game-changer for super, and we want everyone’s super to be protected by the test.”