There’s a well-worn phrase that’s been appearing in Australian television ads for many years now: “Compare the pair.” If the sound of actor John Woods uttering those three words is not familiar to you, I’d suggest you probably don’t watch much TV. (Or if you do, mostly the ABC.) For those not familiar with it, the ad encourages Australians to compare the performance of super funds.
It’s generally good advice, for any product, not just super funds. Which makes it rather curious that a yearly report from the Australian Prudential Regulation Authority (APRA) prevents some comparisons. So says superannuation advocacy group Super Consumers Australia (SCA).
The report in question is the 2024 superannuation performance test. The 2024 edition is the fourth to be released. By APRA’s definition, the report “is designed to increase industry transparency and improve member outcomes by assessing the long-term performance of superannuation products against tailored benchmarks, with consequences for those that fail”.
And there’s evidence to suggest those aims are being met. As the report explains: “For the first time, all MySuper products passed the test. This compares with one fail in 2023, five fails in 2022 and 13 fails in the inaugural test in 2021.”
So what, then, is the problem? According to the SCA, all four editions of the report have omitted a crucial cohort of super fund members: retirees.
The missing super link
Following the release of the APRA report on Friday, SCA immediately fired off a media statement in response. “Today’s test results covered 19.8 million member accounts worth $1.47 trillion,” it said. “The performance test is now in its fourth year of operation, but continues to leave out the 1.3 million accounts of retirees worth $451 billion from testing.”
SCA director Xavier O’Halloran said retirees were entitled to the same information as all other super fund members. “Retirees deserve to know if their super investments are good value for money,” he said.
APRA’s omission of test results is all the more bewildering considering it’s had access to relevant data for two years. “APRA has collected data on historical performance of retirement account-based pensions since 2022, but has not published this data. Account-based pensions are similar investments to the MySuper and trustee-directed products that are tested each year, but they are not currently tested.”
With 18 poorly performing MySuper options driven out of the system, the effectiveness of APRA’s performance test is clear. Mr O’Halloran wants retirees to enjoy the same warnings and protections.
Equal rights for retirees
“APRA has been sitting on this data for several years while retirees languish in accounts serving up high fees and poor performance,” he said. “We are calling on APRA to release the data before the end of the year so that Australian retirees can avoid poor performing super products. The performance test has been a game changer for super, and we want everyone’s super to be protected by the test.”
YourLifeChoices has contacted APRA for comment.
Have you been following APRA’s yearly reports? How has your super fund been performing? Let us know via the comments section below.
Also read: Most Aussies don’t know how super works
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