Super Consumers Australia: “System-wide quality testing needed”

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Original media release by Super Consumers Australia (31/08/2023).

Today’s super performance test results have revealed 96 underperforming choice products in
the market, and one underperforming default MySuper product. Disappointingly 12% of the
tested choice market has failed to pass APRA’s quality benchmark, with 60,000 individual
member accounts affected.

“We strongly encourage people with their retirement savings invested in these super funds to
consider whether they’re getting value for money. Failing the performance test is a clear sign
that something has gone wrong at these funds,” says Xavier O’Halloran, Director, Super
Consumers Australia.

“Poorly performing funds are a drain on people’s retirement savings so the message from the
public is clear: lift your game, or leave the market,” says O’Halloran.

“We commend the Government for moving ahead with plans to expand the performance test,
and cracking down on shoddy choice products. Our research has shown products which
previously failed the performance test cut their fees by 20% on average.

Failing super funds now need to act in their members’ best financial interests by merging or finding other business improvements, like reducing fees.”

“There remains a major blindspot in the test – it currently doesn’t apply to retirement products.
This leaves Australian retirees without protection when they need it most.”

In March 2023 there were 1.3 million member accounts in the retirement phase, holding $396
billion in members’ money. The recent Intergenerational Report shows we can expect these
numbers to grow in the coming years, as super plays a bigger role in funding our retirement

“The bad news is there’s little transparency over retirement products’ fees and performance, and
no accountability for funds that poorly manage retirement products. Without this, how can the
growing number of Australian retirees be confident that their fund is operating in their best

“As a matter of urgency, we’re calling on the Government to expand an appropriate performance
test to all APRA-regulated funds, including retirement products,” said O’Halloran. “In the
meantime, we’ll continue to work with the Government on tweaks and improvements to the
current test.”