Is Your Superannuation Fund Performing? A Deep Dive into APRA’s Latest Findings
The landscape of Australian superannuation is under the microscope, and the Australian Prudential Regulation Authority’s (APRA) latest report rings alarm bells for retirement savers nationwide.
APRA’s Alarming Verdict on Super Funds
The recent performance test by APRA has unveiled a stark reality: a multitude of super funds hover on the brink of failing to meet the regulatory body’s benchmarks. Astonishingly, Rest Super, a titan in the superannuation realm with assets totaling $67 billion, narrowly avoided falling short.
Spotlight on the Laggards
The scrutiny didn’t end with Rest Super. APRA’s rigorous evaluation pinpointed several funds, like the TWU Super’s Balanced option and Mine Super’s default offering, as just scraping by. These and a handful of other funds, which manage the retirement wealth of countless Australians, are worth a combined $78 billion.
APRA’s Transparency Initiative: The Super Heat Map
Striving for clarity in the superannuation sector, APRA introduced its annual heat map, casting light on fund performances from the recent assessment. Thirteen funds failed to surpass their benchmarks, a concerning figure for members relying on these for their post-retirement livelihood.
The Concerning Landscape of ‘Choice’ Investment Options
A staggering 115 ‘choice’ investment options, although not part of this year’s assessment, trailed their benchmarks by significant margins. These ‘choice’ options, according to APRA, often yield poorer results compared to default products, with a 60% failure rate over a seven-year span.
Identifying the Underperforming Trustees
The deep dive into APRA’s data also unearths certain trustees like BT Super and Aware Super, beset with a plethora of poorly performing ‘choice’ options. Others in the spotlight for subpar returns include EISS Super and Australian Catholic Super, among others.
Navigating Towards Enhanced Accountability
With the superannuation sector’s value exceeding $3.4 trillion, the urgency for transparency and accountability is at an all-time high. APRA’s stance on performance tracking has spurred action, with 22 default products shuttered since the 2019 heat map’s debut. APRA’s superannuation lead, Margaret Cole, calls for intensified oversight to ensure trustees are upholding their duty to their members.
Your Superannuation Health: A Call to Action
The revelations from APRA are a clarion call for vigilance. It’s imperative to regularly evaluate your super fund’s performance to secure a stable financial future. Don’t let your retirement savings languish; a superannuation checkup could be due.
