Dud super options cost retirees up to $205,000 – new research
New analysis by Super Consumers Australia has found that retirees in poorly performing superannuation products could lose as much as $205,000 over their retirement. As a result we are calling for increased safeguards to hold poor performing super funds accountable.
The report, Securing Australia’s Retirement: It’s time to protect retirees from dud investment options, reveals that all of the options that failed the Government’s annual performance test this year were also offered to retirees. However, the test does not apply to products offered to retirees, so people with their retirement savings invested in them are none the wiser.
Key findings
- 91% of failed investment options in the past three years were also available in the retirement phase at the time of failure.
- Retirees are invested in all seven of the options that failed the 2025 performance test.
- Poor-performing retirement products could reduce a retiree’s income by $57,000 to $205,000 over the course of retirement.
- Funds including AMP, Russell Investments, Colonial First State and REST consistently offered underperforming retirement products across multiple growth categories.
- 74% of Australians support extending the performance test to retirement products, and an even larger 84% call for greater transparency so retirees can compare how their fund performs.
Call for reform
The Federal Government is currently reviewing the performance test. Super Consumers Australia is urging it to immediately extend it to protect retirees.
“It’s unreasonable that a 64-year-old is protected by a performance test, yet the moment they retire and move into an identical product, that safeguard disappears,” said Dr. Katrina Ellis, Deputy CEO.
“Retirees deserve the same protections as workers. Without them, people risk losing hundreds of thousands of dollars in retirement income and living standards will suffer.”
“The superannuation system is meant to provide Australians with a dignified retirement, not leave them in the dark about whether their money is working for them,” said Dr. Ellis.
“The Federal Government must extend the performance test and comparison tool to ensure retirees can avoid the duds and put their money in better performing funds. Anything less is leaving retirees exposed.”
Read the full report.