Adjust performance test on infrastructure – ASFA

Mike Taylor

Managing Editor/Publisher, Financial Newswire

10 March 2026

Major superannuation funds grouping, the Association of Superannuation Funds of Australia (ASFA), is calling for the superannuation performance test to be adjusted to better encourage investment in listed infrastructure and venture capital.

ASFA has told the Parliamentary Select Committee on Productivity that while the performance test, as currently devised, has delivered significant benefits in terms of removing under-performing products it has also risked creating investment biases.

The ASFA submission has recommended that the performance test be reformed to better support industry innovation.

“Over the past five years, the performance test has delivered significant benefits. In particular, the performance test has improved transparency for members and accountability for industry, removed underperforming products from the market and enhanced member confidence in the system,” it said.

“However, the current framework applies a single benchmark-driven test to a wide range of products and investment styles. This risks a bias in strategic asset allocation towards asset classes with (relatively) representative benchmarks – listed equities for example – at the expense of other asset classes such as unlisted infrastructure and venture capital,” the ASFA submission said/

It said that ASFA supports the need for an objective test that assesses the performance of superannuation products, but also a test that can better support industry innovation and align with shifting community expectations.

“ASFA considers that reforms to modernise the performance test focus on generating benefits for members of superannuation funds as [being] the paramount outcome, while strengthening regulatory oversight and facilitating a more efficient allocation of capital for the Australian economy,” the ASFA submission said.

“In this regard, design of the performance test should seek to reduce distortions to funds’ investment decisions and provide funds with greater flexibility to allocate superannuation capital,” it said.

The submission also pointed to the need for reforms to the regulation of private markets not to unduly hinder participation by superannuation funds.

It said that with respect to superannuation, potential reforms should recognise the superannuation industry’s “robust (and improving) investment governance practices and sophisticated approach to investment decision making, including with respect to private markets”.