‘Failed’ super funds roar back on performance and fees
Superannuation funds which have previously been deemed to have failed the Your Future, Your Super (YFYS) performance test have bounced back both in terms of investment performance and cost to members.
Foremost among the previously ‘failed’ funds has been Colonial First State which last week pointed to the fact that it had delivered double-digit returns across three of its superannuation product offerings.
In 2021 the CFS FirstChoice Employer Super product was deemed to have failed the performance test last week the company announced that its FirstChoice Employer Super products had delivered double digit returns.
At the same time, the latest fee analysis distributed to subscriber superannuation funds by specialist research and ratings house, SuperRatings, has named at least three funds deemed to have failed the 2021 performance test as having amongst the lowest fees, with the CFS product listed 12 while AMG was listed at two.
As well, as comparison of the fees being charged by superannuation funds between 2022 and 2023 reveals that while many of the smaller superannuation funds have been driving down fees, the same cannot be said about larger funds.
While senior Australian Prudential Regulation Authority (APRA) executives have argued that large funds are more likely to deliver lower fees, the SuperRatings data suggests that a number of larger funds have become more expensive over the past 12 months.
Among the large funds in the most expensive quartile are Australian Retirement Trust, Hostplus, MLC Masterkey and Plum Super.
The analysis shows that the average fee now stands at $491 down from $499 a year earlier and that the number of MySuper products has dropped from 72 last year, to 62as at 30 June, this year.
It is well-recognised that many superannuation funds have pulled down fees in a bid to assist them in passing the YFYS performance test.
More than half of the funds deemed to have failed the first performance test have now been the subject of mergers or other transactions including Christian Super which merged with Australian Ethical and BT Super which became part of Mercer while EISS Super was merged into Cbus.
APRA is expected to release the results of the next performance test next month.
Always bound to happen.
Proof the Gov. (Labor or Lib’s), ASIC, APRA and all bureaucrats don’t know the first thing about the instruments they’re meant to be governing or legislating on.
Although they will erroneously claim full credit for this “recovery”!
APRA are waging an ideological war in their pursuit to force super fund mergers. Less competition has rarely ever delivered positive outcomes , neither has more government control and involvement.