37 trustee directed products fail super performance test
The Australian Prudential Regulation Authority (APRA) has released its latest superannuation performance test outcomes with 37 trustee directed products deemed to have failed, 27 for a second time.
By comparison, there were no failures with respect to MySuper products.
Of the trustee directed products, 37 out of 192 platform products failed to meet the test benchmarks.
APRA said this includes 27 products which have failed for a second time and will now be closed to new members. None of the 398 non-platform products assessed failed to meet the benchmarks. In 2023, the first year that choice products were included in the test, 76 platform and 20 non-platform trustee directed products failed the test.
The 37 failed trustee directed products were concentrated in products offered by two trustees: 36 from N.M. Superannuation Proprietary Limited and one from I.O.O.F. Investment Management Limited.
Commenting on the outcome, APRA Deputy Chair Margaret Cole welcomed the overall test results but said that APRA’s priority focus on product performance would not diminish.
“This year’s results demonstrate the progress being made to address underperformance. At the end of June, all 15.7 million MySuper member accounts, with combined assets of nearly $1.1 trillion, were invested in performing products.3
“We also note that trustee activity to eliminate underperforming products, through the consolidation, restructuring or withdrawal of investment offerings, has contributed to a sharp decrease in test failures by trustee directed products.
“These are pleasing results but, as trustees well know, past performance is no guarantee of future success. Even based on existing performance, there is significant scope for improvement across key drivers of performance, including costs and fees, and investment returns.”
Cole said APRA planned to publish a comprehensive package of superannuation product performance metrics, data and insights in late September, as part of APRA’s ongoing scrutiny of how trustees are meeting their obligation to act in the best financial interests of their members.
Cole and APRA are going to be responsible for the biggest concentrated investment risk in the history of investments. Does the Government going to payout everyone when they get it all wrong? by setting the benchmark for asset allocation? If they used Hostplus balance option benchmark everyone would have to be 98% in Growth assets everyone just needs to call it a “balanced option”
APRA must be mates with Mr Jones, just keep saying you are going to fix the hot mess and then do nothing but make things worst. Jones I hope you get voted out, so you can go back to your fake job in the union clipping the ticket from money coming from super funds from your CFMEU mates and keep promising you are going to fix that next mess….
Whilst it is a flawed test the institutions knew the required results and yet AMP again failed miserably. The company just keeps on getting things wrong.
To be fair to AMP ;
These options are all closed to new investor products which and if were moved could trigger massive cgt.
It’s a rubbish test to use $50k as the balance.
Canberra needs to do better.
Not closing down a fund because it is half a % of performance so they are not hit with a huge tax bill is in the best interest of a client and it is no different to business people that have sold their business but a company structure continues because they have retained earning and they continue to pay this out over a number of years to minimize tax.