Australian superannuation funds fail performance testwritten by Bella Palmer
According to Superannuation Minister Jane Hume, eight superannuation funds have already closed since the reforms were announced
Australians are being urged to check how their superannuation performs after the regulator found 13 of the country's funds had failed a test that looked at both fees and investment returns.
The first annual performance test run by the Australian Prudential Regulation Authority (APRA) this year found that $56.2billion worth of taxpayers' superannuation was invested in underperforming products.
As a result more than a million Australians will soon receive a letter from APRA urging them to switch their superannuation to get better value for money.
Some of the big funds given a failing score include Commonwealth Bank Group Super, BT Super's Retirement Wrap and The Victorian Independent Schools Superannuation Fund.
Calling out super underperforming funds in Australia's $3trillion superannuation industry is part of the federal government's Your Future, Your Super reforms which came into effect on July 1.
According to Superannuation Minister Jane Hume, eight superannuation funds have already closed since the reforms were announced.
In contrast the top ten best funds by net return for a 30-year-old with $50,000 include AustraliaSuper with a 9.44 per cent return, HOSTPLUS with a 9.33 per cent return and Unisuper with 9.01 per cent.
Ms Hume said of the 76 funds scored, those that failed would have to write to their 1.1million account holders and provide them with details of the YourSuper comparison tool so they can look for a better deal.
She said the changes worked to ensure the superannuation system works harder for all Australians by increasing transparency and accountability of returns generated for members.
Association of Superannuation Funds of Australia chief executive Martin Fahy argued the test was flawed because customers weren't told by how much their product failed.
Even the funds in this test that are underperforming are doubling the money of members every 10 years. They're generating 7 to 7.5 per cent returns, amazing returns in the current circumstances, Dr Fahy told the ABC. He also added the test also did not take into account ethical investing.
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