The Australian Prudential Regulation Authority (APRA) has unveiled the results of its 2024 superannuation performance test, which evaluated 57 MySuper products and 590 trustee directed products, a subset of the Choice segment.
For the first time since the test was first launched, all MySuper products, comprising 15.7-million-member accounts and nearly $1.1 trillion in total assets, passed.
In comparison, one product failed in 2023, five failed in 2022, and 13 failed the inaugural test back in 2021.
Looking at trustee directed products, APRA found 37 out of 192 platform products failed to meet the test benchmarks, with 27 of these products failing for a second time. This means they will now be closed to new members.
The 37 failed trustee directed products were concentrated in products offered by two trustees: 36 from NM Superannuation Proprietary Limited and one from IOOF Investment Management Limited.
APRA added that none of the 398 non-platform products assessed failed to meet the benchmarks. Last year, the first year that Choice products were included in the test, 76 platform and 20 non-platform trustee directed products failed the test.
“This year’s results demonstrate the progress being made to address underperformance,” APRA deputy chair Margaret Cole said.
“We also note that trustee activity to eliminate underperforming products, through the consolidation, restructuring or withdrawal of investment offerings, has contributed to a sharp decrease in test failures by trustee directed products.”
She described the results as “pleasing” but highlighted that “past performance is no guarantee of future success”.
“Even based on existing performance, there is significant scope for improvement across key drivers of performance, including costs and fees, and investment returns,” she said.
Cole added that APRA plans to publish a comprehensive package of superannuation product performance metrics, data and insights in late September, as part of APRA’s ongoing scrutiny of how trustees are meeting their obligation to act in the best financial interests of their members.
