BT prepares employers/members for second performance test fail

Employers of members of the BT Super MySuper product which failed last year’s inaugural Your Future, Your Super superannuation performance test have been informed of their options in the event it fails a second time.

With the Australian Prudential Regulation Authority (APRA) expected to release the outcome of the second performance test within next week or so, corporate clients of the BT product are understood to have been forewarned of their options and alternatives.

And in circumstances where the BT superannuation business is being acquired by Mercer, the letter is understood to have signalled that while the BT product will be precluded from accepting new members, they will be able to join the equivalent Mercer product.

Asked about the situation, a BT spokesperson said the company had “not been formally advised by APRA of the final outcome of the annual performance assessment (APA)”.

“We will write to BT MySuper members when we know the final outcome should we fail the APA, in the interim we will communicate with our corporate clients appropriately should they need to establish an alternative default fund,” the spokesperson said.

“To create a long-term sustainable fund, BT Super intends to merge into Mercer Super in the first half of 2023. This merger has the potential for members to benefit from stronger performance, lower costs, more investment choice, broader member services and continuity of insurance.”

Westpac announced in late May that it had entered into agreements with Mercer to merge BT Personal and Corporate Super and sell Advance Asset Management with the transaction not expected to complete until some time in the first half of next year.

The situation with respect to the failed BT product stands in contrast to that of Colonial First State’s FirstChoice Employer Super with the company expressing confidence that it will pass muster with respect to this year’s performance test.

Discussing the issue with Financial Newswire, a spokesman for Colonial First State said the company expected that the product would pass the test this year.

In recent references of the YFYS performance test, members of the APRA executive have indicated that they have been working with three funds regarded as being in danger of failing the performance test for a second time and which are not already the subject of mergers or successor fund transfers.

Thirteen products were named by APRA has failing the first YFYS performance test and were named as: