Funds which fail the Your Future, Your Super performance test for two consecutive years will be unable to accept any new beneficiaries until they pass a future test, according to updated guidance.
In the information from the Australian Prudential Regulation Authority (APRA), it said Registrable Superannuation Entity (RSE) licensees were expected to ensure they complied with obligations to prevent new beneficiaries from holding the product on and from the day the second fail notification was received.
This would be in place until the fund had passed a future performance test.
Any contributions received from or on behalf of persons who were not holding the product before that day of the second fail notification would need to be returned.
Licensees of MySuper products were expected to ensure their stakeholders and employer-sponsors were aware that this was a possibility if the fund failed for a second time.
The regulator said it would provide a written notification to licensees of their performance test prior to publication of results at the end of August but that the gap would be short. Notice would then need to be given to beneficiaries who held the product within 28 days.
“Recognising that the timing between the running of the performance test and notification is short, APRA’s ability to provide any results in advance of publication is limited. However, provisional results will be provided to RSE licensees ahead of publication where a product appears likely to fail the test.”