Nearly half of the superannuation system would be exempt from new performance tests designed to protect members from dud funds.
Around $881 billion belonging to 8.4 million member accounts could be excluded from the Your Future, Your Super performance benchmarks – roughly 47 per cent of the APRA-regulated system – due to the government’s decision to exclude non-trustee-directed products, according to lobby group Industry Super Australia (ISA).
“Among those currently out of the test are notorious dud investment products whose poor performance and fee gouging Banking Royal commissioner Kenneth Hayne savaged in his final report,” Industry Super Australia said.
“The government will only initially test the performance of MySuper and ‘trustee-directed products’ in the Choice sector, excluding hundreds of products and investment offerings.”
ISA warned that there was no time frame to extend the performance benchmarks beyond trustee-directed products and that the proposal would leave 70 per cent of the retail super fund sector out of scope.
“If the government doesn’t apply new performance tests to all super funds and products, millions of Australian workers may never find out that their savings are being eaten away by a dud investment,” said ISA chief executive Bernie Dean.
“Every worker, no matter if they choose a retail or industry fund product, deserves to know how their super fund stacks up so that they can make an informed decision about switching to a better fund.”
One of the peak superannuation bodies has claimed that industry funds have “significantly outperformed” their retail counterparts and ca...