The financial regulator has named five pension funds that failed their annual performance tests, and four of these funds will no longer be able to accept new members.
The Australian Prudential Regulation Authority (APRA) on Wednesday published the results of its annual test of 69 no-frills MySuper products, representing a total of 13.7 million retirement accounts.
APRA said funds with 559,000 member accounts failed its performance test for the second year in a row.Credit:Louis Douvis
APRA said a MySuper product provided by Westpac-owned BT, a Westpac staff fund, and products from the Australian Catholic Superannuation Retirement Fund, Energy Industries Superannuation and AMG Super had all failed the test.
With the exception of Westpac’s staff fund, the other four that failed the test have now been closed to new members as a result of the APRA policy, which requires funds to close new members if they fail the test two years in a row.
The largest fund that has been forced to close to new members is the BT MySuper fund.
Charging
The Westpac fund, BT, Australian Catholic Superannuation Retirement Fund and Energy Industries Superannuation have announced plans to merge with rivals. In all, APRA said funds with 559,000 member accounts failed the performance test for the second year in a row.
APRA member Margaret Cole said the performance tests, which were introduced last year, were leading to better results for members by leveraging funds to reduce fees to improve overall member returns. She said that 38 percent of people on MySuper products were paying lower rates than last year.
“This is the culmination of APRA’s heightened supervisory approach, prompting trustees to take meaningful action to improve member outcomes. APRA encourages retirement trustees to continue exploring ways to improve the efficiency of their MySuper products,” said Cole.
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