Data from the Australian Prudential Regulation Authority (APRA) has found only a small proportion of superannuation members in products that failed the Your Future, Your Super performance test have moved funds.
This was despite having received the required communication that notified members that their product was “officially” underperforming.
From the one million member accounts in products that failed the test, around 68,000 closed, which accounted for 7% of total accounts in the failed products or 4.2% ($2.2 billion) of assets.
APRA urged super members to actively engage with their super to maximise their retirement futures, especially those whose MySuper products failed the recent performance test.
The results of the first annual performance test of MySuper products was released on 31 August with 13 of the 76 MySuper products assessed having failed.
APRA executive board member, Margaret Cole, said members had every right to consider whether they could get better outcomes elsewhere.
“The trustees of APRA-regulated superannuation funds have a legal duty to act in the best financial interests of their members, and APRA is working hard to ensure they fulfil that obligation,” Cole said.
“That’s not a reason for members to sit back and avoid taking steps to act in their own best financial interests by ensuring they are in a high performing super product. Research shows that the difference in outcomes between a top product and an underperforming one can amount to hundreds of thousands of dollars over a working life.
“The vast range of products and options on the market can make the idea of trying to choose a new fund seem overwhelming, but there has never been more information available to consumers to help them make informed decisions about their super.”
Cole said members should use the Australian Taxation Office YourSuper comparison tool, which incorporated the findings of the performance test, as well as the Australian Securities and Investments Commission’s MoneySmart website.
“For those members with their savings in choice products, APRA will release its first Choice Product Heatmap next month, which will deliver clear, credible and comparable insights on the performance of a large segment of the choice market,” Cole said.
“At the same time, the next MySuper Product heatmap will include the performance test scores of every product assessed.
“Increased transparency is a powerful tool for regulators to bring about improvements in superannuation fund performance, but members should never forget they also have the power to make decisions that will better secure their future in retirement.”