The financial regulator has named five pension funds that have failed its annual performance tests, and four of those funds will no longer be able to accept new members.
The Australian Prudential Regulation Authority (APRA) on Wednesday released the results of its annual testing of 69 no-frills MySuper products, which represent a total of 13.7 million retirement accounts.
APRA said a MySuper product supplied by BT, owned by Westpac, a Westpac staff fund, and products from the Australian Catholic Superannuation Retirement Fund, Energy Industries Superannuation and AMG Super all failed the test.
With the exception of Westpac’s staff fund, the other four that fail the test have now been closed to new members due to APRA policy, which requires the funds to be closed to new members if they fail the test. test two years in a row.
The biggest fund that has been forced to close to new members is the BT MySuper fund.
Westpac’s fund, BT, the Australian Catholic Superannuation Retirement Fund and Energy Industries Superannuation have all announced plans to merge with rivals. In total, APRA said funds with 559,000 member accounts failed the performance test for the second consecutive year.
APRA member Margaret Cole said performance testing, introduced last year, was giving members better results by pushing funds to cut fees to improve members’ total return. She said 38% of people using MySuper products paid lower fees than last year.
“It’s the culmination of APRA’s intensified oversight approach, which drives administrators to take meaningful action to improve member outcomes. APRA encourages superannuation administrators to continue exploring ways to improve the effectiveness of their MySuper products,” said Cole.