04/06/2024
💥 More than $4 billion in Super Funds Fail APRA’s Performance Test
The latest report from the financial watchdog, the Australian Prudential Regulatory Authority (APRA), reveals alarming news for many Australians. Over 64,000 superannuation accounts, holding nearly $4.2 billion, are in funds that have failed to meet performance benchmarks.
APRA’s annual performance test evaluates super funds based on fees and investment returns. This year’s expanded test covered a wider range of products, uncovering that one MySuper fund and 96 trustee-directed products—mainly from AMP and Insignia—fell short of the required standards.
Since the test's inception in 2021, it has led to significant changes: nine underperforming MySuper products have exited the market, and 800,000 members have moved their $39 billion in assets to better-performing products. However, the challenge remains, especially for those in self-selected super funds, which require more nuanced evaluation than default MySuper accounts.
Despite these findings, switching funds isn't always straightforward due to tax implications. Financial experts urge the government to update capital gains tax processes to facilitate easier transitions for consumers wanting to move away from underperforming funds.
