Author: Leigh Jobling, Partner, Investment Advisory & Wealth
APRA – the government agency that regulates big super funds – has released a report naming 13 funds for underperforming:
- AMG Super: AMG MySuper
- ASGARD Independence Plan Division Two: ASGARD Employee MySuper
- Australian Catholic Superannuation and Retirement Fund: LifetimeOne
- AvSuper Fund: AvSuper Growth (MySuper)
- BOC Gases Superannuation Fund: BOC MySuper
- Christian Super: My Ethical Super
- Colonial First State FirstChoice Superannuation Trust
- Commonwealth Bank Group Super: Accumulate Plus Balanced
- Energy Industries Superannuation Scheme-Pool A: Balanced (MySuper)
- Labour Union Co-Operative Retirement Fund: MySuper Balanced
- Maritime Super: MYSUPER INVESTMENT OPTION
- Retirement Wrap: BT Super MySuper
- The Victorian Independent Schools Superannuation Fund: VISSF Balanced Option (MySuper Product)
76 funds in total were required to report and the assessment only applies the MySuper products. These are typically the lower fee “Balanced” option workers are allocated when they join a fund if they have not selected their own investment strategy. My Super funds hold the bulk of the savings of working Australians.
This is a new initiative requiring super funds to be accountable for meeting the investment performance objectives and weed out the most poorly managed funds from the superannuation system.
It’s well understood that over a person’s working life and into retirement, a fund that underperforms by only 1% – 2% over a 50 year period (approx.) can cost the superannuation member and their family potentially hundreds of thousands of dollars.
If these funds fail to meet their performance benchmarks again in 2021/22, then they will no longer be able to accept new members. Collectively these 13 funds have 1.1 million members and manage $56.2 billion of member’s money.
If you are a member of one of these funds, the super fund will write you a letter, letting you know they have not met their performance criteria, encouraging you to review your investment strategy.
It highlights that the cheapest and biggest is not always best, and an apathetic, passive mind-set towards your super can be fraught with danger and cost you in the long run.
At TAG, none of our clients are invested in any of the failing products and our clients are not affected.
If you have questions or need any assistance, please do not hesitate to contact us on 9886 0800 or via email.
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Disclaimer: The information contained is general in nature. Professional advice should be sought before acting on any aspect on this page. Financial planning services provided by TAG Financial Advisors Pty Ltd (ABN 77 154 205 017 AFSL 415632), a wholly owned subsidiary of TAG Financial Services Pty Ltd (ABN 67 075 374 686). Copyright 2021. Please do not reproduce without the expressed written consent of the author.