The five worst performing superfunds in Australia

Five MySuper products failed the second annual MySuper performance test, and four of them failed a second time.

The product that failed this year’s performance test for the first time is Westpac Group Plan MySuper.

Westpac must now identify the causes of poor performance and start working to correct it. You should also assess the possible implications of the failure on the fund and its sustainability, developing a plan to close the product and switch affiliates to another, if necessary.

four mysuper products fail performance tests for the second time apra

In a notice to members now available online, Westpac said: “For Lifestage products such as those offered by BT as part of the Westpac Group Plan, the annual performance evaluation takes into account the weighted return on assets of all Lifestage investment options collectively to calculate a single return. The combined eight-year return on our Westpac Group Plan MySuper product did not exceed the annual performance evaluation.”

The four options that failed the test a second time are Australian Catholic Superannuation and Retirement Fund’s LifetimeOne, EISS Super’s MySuper – Balanced, BT Super’s MySuper and AMG Super.

All but AMG Super have already made moves to merge with other funds. ACSRF is currently undergoing a merger with UniSuper, EISS Super is merging with Cbus, and BT’s retirement products will soon move to Mercer.

Combined, the failed products are home to some 600,000 members and nearly $28 billion in retirement savings.

Those who failed a second time have until September 28 to notify their members. They cannot now accept new members and cannot be offered as a default fund to any employer. They must also return any contributions made by new members after today.

APRA said it will engage with all four trustees to ensure members achieve better results as quickly and safely as possible.

In total, APRA evaluated 69 MySuper products with a 93% approval rating. In addition, five of the products that failed last year’s test passed this year.

“Pleasingly, nearly 96% of MySuper’s retirement members are now on a working MySuper product, which equates to 13.1 million member accounts,” says APRA member Margaret Cole.

“Equally positive, the performance test has contributed to more than 5.1 million MySuper members (just over 38%) now paying lower rates than last year.

“This is the culmination of APRA’s enhanced supervision approach, which drives 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.” .

This article first appeared in Financial Standard

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