The release of today’s Your Future, Your Super performance test results are an “important first step” but $56 billion is still held by underperforming funds.
It was announced that 13 superannuation funds had failed the performance test, which covered MySuper funds, which accounted for 1.1 million members and $56.2 billion in assets.
In a joint statement, Treasurer Josh Frydenberg and minister for superannuation, financial services and the digital economy, Jane Hume, said: “The test assessed the performance of 76 MySuper products and found that 13 of these have underperformed.
“Importantly, eight products have exited the market since the performance test was announced by the Government, demonstrating that the positive impact of the test extends beyond singling out underperforming funds.”
But industry associations have expressed concern about those super funds which were currently excluded from the performance.
Eva Scheerlinck, chief executive of the Australian Institute of Superannuation Trustees, said: “While it’s important to be performance testing MySuper funds, we need to recognise that this is the sector that generally outperforms other types of super funds where millions of members currently languish.
“More than one third of super savings are currently excluded from scrutiny and disclosure and these members have no way of knowing whether their fund would have failed the test.”
Bernie Dean, chief executive of Industry Super Australia, said: “Performance tests will be another tool consumers can use to find out if they are in a dud fund or a good one.
“But with the loopholes in the test still allowing dud funds to go on taking profits, it’s even more important that Australians find a high-quality fund run to only benefit them, with low-fees and good returns.
“Any fund that failed the test while creaming profits off the top should have to justify how it is in the best financial interest of their members – unfortunately these laws allow them to go on gouging.”