Nearly 100 super products have been named and shamed by the financial watchdog for failing its annual performance test.
The Australian Prudential Regulation Authority (APRA)’s test assesses the long-term performance of super products against tailored benchmarks, with consequences for those that fail.
This year’s test was expanded to include 805 “trustee directed products”, which is a type of choice super product. It also assessed 64 MySuper products.
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Choice super products are those you choose yourself. In comparison, MySuper products are default products chosen by your employer.
97 super funds failed
This year, 96 of the trustee-directed products and one MySuper product failed the test.
Of the failed trustee-directed products, 75 per cent were concentrated in products offered by just four trustees: NM Superannuation Proprietary Limited, Nulis Nominees, Oasis Fund Management Limited and OnePath Custodians.
The trustee-directed products are mostly owned by AMP and Insignia (formerly IOOF). Other funds that failed the test included the Australian Retirement Trust’s QSuper Socially Responsible fund, and Bendigo and Adelaide Bank’s The Bendigo Superannuation Plan.
The failed products represent about 1.5 per cent of AMP's funds under management, and less than 1 per cent for Insignia.
The MySuper product - AMG MySuper - failed for the third year in a row. It has been closed to new members since 2022. Last week, it was announced it would be closed to existing members.
The full list of failed products is available on APRA’s website.
APRA deputy chair Margaret Cole said the annual performance test remained a “powerful tool” to help APRA hold super funds to account for product performance, fees and costs.
“Since its introduction in 2021, nine underperforming MySuper products have exited the market. And a total of 800,000 members, with combined assets of $39 billion, have moved to better-performing products,” Cole said.
Trustees of products that fail the test must notify their members by September 28, 2023. If a product fails two years in a row, the trustees cannot accept new members.