Superannuation performance test results show the system is working – now let’s protect retirees too 

Super Consumers Australia says the latest superannuation performance test results show the test is doing its job: identifying underperforming options and warning consumers.

While the vast majority of tested investment options passed, seven platform products failed and will have to notify their 8,500 members that they have underperformed for the last 10 years. Four of these have failed for the second time, triggering the obligation to close the product to new people.

Deputy CEO Dr. Katrina Ellis said the lack of surprise in this year’s results is itself a sign of success.

“The fact that only seven options failed means the test is doing its job. It is keeping super funds on their toes, alerting the public to poor performance, preventing new members from joining failed products and driving underperformers to shape up or shut down,” Dr. Ellis said.

“This kind of scrutiny simply didn’t exist before the performance test. Consumers now have better tools and clearer signals to make informed choices.”

Dr. Ellis said the next step is to extend these protections to the 1.4 million Australians with superannuation in retirement accounts.

“It’s a glaring gap that retirement products, like account-based pensions, aren’t subject to the same scrutiny. People need confidence that their money will keep working for them long after they’ve stopped working themselves.”

As the Treasurer Jim Chalmers considers changes to the test, Super Consumers is warning against weakening it in response to industry pressure.

“The performance test has been a game-changer for super. Since the performance test started, it has driven fees down by an estimated $100 million per year,” Dr Ellis said.

“The greatest efficiency gain the Government could make is to extend this same benefit to retirees.”

For people who want to find a good superannuation fund while they are working, ASIC’s MoneySmart website has some useful guidance on what to consider when choosing a fund. You can also compare returns and fees for all MySuper products on the ATO’s YourSuper Comparison tool.