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APRA names and shames super funds with ‘significantly poor’ performance

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Six funds were found to have delivered significantly poor investment returns.

APRA’s latest MySuper Heatmap has revealed that six MySuper products have suffered from significantly poor investment performance over the past eight years.

These six products, which collectively account for 5.5 per cent of all MySuper accounts, were found to have lagged the heatmap benchmarks by an average of more than 0.50 per cent a year.

Four of the six underperforming products — Westpac Group Plan MySuper, EISS Super Balanced (MySuper), BT Super MySuper and AMG MySuper — failed APRA’s latest annual performance test.

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Meanwhile, the remaining two — Colonial First State FirstChoice Employer Super and Commonwealth Essential Super — received a pass in this year’s test.

APRA said that around 350,000 fewer members were found to be in MySuper products with significantly poor investment performance than was seen in 2021. However, the prudential regulator also reported that around 800,000 member accounts were still in these underperforming products.

According to APRA deputy chair Margaret Cole, the annual heatmap has helped to eradicate unacceptable product performance, improve transparency across the super industry, and hold trustees to account for the outcomes being delivered to members after launching in 2019.

“Since its introduction, we have seen costs to members reduced, many underperforming products closed, and a drop in the number of members in funds with significantly poor investment performance,” she said.

“However, there are still hundreds of thousands of members in funds with sub-par investment performance, and the industry has serious sustainability issues to address.”

As part of the latest heatmap, APRA also identified a further nine products with “poor performance”, which it defines as lagging benchmarks by 0 to 0.50 per cent per annum over eight years.

These include ANZ Smart Choice Super, AvSuper Growth (MySuper), Mine Superannuation Default Lifecycle, Guild Retirement Fund (MySuper), Bendigo MySuper, Russell Investments Master Trust GoalTracker, Virgin Money MySuper and Mercer Santos MySuper.

Australian Catholic Superannuation LifetimeOne, which failed the annual performance test this year, was also among the poor performers highlighted by APRA. 

Meanwhile, the regulator estimated that 8.1 million members, or 56 per cent of member accounts, have experienced a drop in fees and costs since last year’s heatmap was released, which has saved members an estimated $210 million.

Since the first heatmap in 2019, 28 MySuper products have closed, with 1.5 million member accounts containing $51.6 billion in member benefits being transferred to other products.

“APRA expects that trustees with underperforming products will consider options to transfer members or otherwise restructure their businesses, particularly where sustainability pressures are significant,” Ms Cole concluded.

APRA names and shames super funds with ‘significantly poor’ performance

Six funds were found to have delivered significantly poor investment returns.

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Jon Bragg

Jon Bragg

Jon Bragg is a journalist for Momentum Media's Investor Daily, nestegg and ifa. He enjoys writing about a wide variety of financial topics and issues and exploring the many implications they have on all aspects of life.

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