APRA disappointed failed fund members have stayed put
The Australian Prudential Regulation Authority (APRA) has signalled its disappointment that few members of ‘failed’ superannuation funds chose to move to new products.
In an announcement released today, APRA said it was urging members, especially those whose MySuper products had failed the performance test, to more actively engage with their super to maximise their retirement futures.
APRA said it was making the call as data shows only a small proportion of members of the products that failed the test have moved their savings elsewhere despite receiving letters notifying them that their product was officially underperforming.
“APRA released the results of the first annual performance test of MySuper products on 31 August. Of the 76 MySuper products assessed by performance test, which was introduced as part of the Government’s Your Future, Your Super reforms, 13 failed and were forced to write to members notifying them of the result.”
“APRA data collected from the 13 failed MySuper products shows that some members have acted on advice in the letter that they should consider moving their savings to a better performing product, however it is early days,” it said in a statement.
“From the one million member accounts in products that failed the test, around 68,000 have been closed. That accounts for 7% of total accounts in the failed products, or 4.2% ($2.2 billion) of assets.
“Although APRA is working with the trustees of the failed products to ensure they urgently improve their performance, or to encourage them to merge with more sustainable funds, Executive Board Member Margaret Cole said members had every right to consider whether they could get better outcomes elsewhere,” its statement said.