The Chronicle


- Paul Clitheroe is chairman of InvestSMAR­T, Chair of the Ecstra Foundation and chief commentato­r for Money Magazine.

MySuper funds have just been tested for fees and investment performanc­e, and 13 have been slapped with a “fail”.

Is yours among them? Superannua­tion watchdog APRA has delivered its verdict on the performanc­e of the nation’s 80 MySuper accounts.

These are the default funds designed to provide low fees and basic levels of insurance.

If you haven’t given your employer instructio­ns about which fund you’d like the boss’s compulsory contributi­ons paid into, it’s a fair bet your retirement savings are in a MySuper product.

APRA reviewed the funds as part of the Your Future, Your Super reforms introduced in the 2020-21 federal budget.

It will be an annual event, and undoubtedl­y one super funds won’t look forward to.

If a MySuper fund fails APRA’s test, it is required to write to members by the end of September, and suggest they take their money elsewhere.

On the plus side, only 13 MySuper accounts have been assessed by APRA as “underperfo­rmers”.

But you don’t have to wait to hear from your fund to know if your super account failed the test. The Tax Office website has a YourSuper comparison tool that shows which funds performed and which underperfo­rmed, and shows the fees and investment returns.

Before bailing out of an underperfo­rming fund, there are a few things to consider. APRA’s performanc­e test is complex. In particular, it looks at the fund’s performanc­e in relation to its investment strategy.

So some funds that failed delivered much higher returns than others that passed. This is why it makes more sense to look before you leap. It’s worth checking the returns your fund has notched up over time, then how it compares to others.

The YourSuper tool allows you to do this and get an idea whether your fund is a chaindragg­er on returns or if it charges relatively high fees.

Switching to a new fund can be good if it helps you enjoy a bigger nest egg, however, it means selecting a fund, transferri­ng your super savings to a new one, and your letting your boss know the details of the new fund.

So take the time to be sure you’re happy with a new fund – or are still comfortabl­e with your old one.

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