The five worst-performing super funds in Australia

Five MySuper products have failed the second annual MySuper performance test, with four of them failing for a second time.

The product that failed this year's performance test for the first time is Westpac Group Plan MySuper.

Westpac must now identify the causes of underperformance and set about working to correct it. It must also assess the potential implications of the failure on the fund and its sustainability, developing a plan to close the product and move members to another, if it becomes necessary.

In a notice to members already available online, Westpac said: "For Lifestage products like those offered by BT as a part of the Westpac Group Plan, the annual performance assessment takes into account the asset-weighted performance of all Lifestage investment options collectively to calculate a single performance return. The combined eight-year performance of our Westpac Group Plan MySuper product failed the annual performance assessment."

The four options that failed the test for a second time are Australian Catholic Superannuation and Retirement Fund's LifetimeOne, EISS Super's MySuper - Balanced, BT Super's MySuper and AMG Super.

All but AMG Super have already made moves to merge with other funds. ACSRF is currently undertaking a merger with UniSuper, EISS Super is merging with Cbus and BT's superannuation products will soon move to Mercer.

Combined, the failed products are home to about 600,000 members and close to $28 billion in retirement savings.

Those that failed for a second time have until September 28 to notify their members. They can now not take on any new members and cannot be offered as a default fund for any employers. They must also return any contributions made by new members after today.

APRA said it will be engaging with the four trustees to ensure members achieve better outcomes as quickly and safely as possible.

In total, APRA assessed 69 MySuper products with 93% passing. Further, five of the products that failed last year's test passed this year.

"Pleasingly, almost 96% of MySuper superannuation members are now in a performing MySuper product, equating to 13.1 million member accounts," says APRA member Margaret Cole.

"Equally positive is that the performance test has contributed to over 5.1 million MySuper members (just over 38%) now paying lower fees than they were last year.

"This is the culmination of APRA's intensified supervisory approach, driving trustees to take meaningful action to improve member outcomes. APRA encourages superannuation trustees to continue to explore ways to improve the efficiency of their MySuper products."

This article first appeared on Financial Standard

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