Six superannuation funds have been identified as under-performing by the latest heatmap from the Australian Prudential Regulation Authority (APRA).
The annual heatmaps evaluated MySuper product performance over the past eight years in investment returns, fees and costs and long-term sustainability of member outcomes.
A fund was classified as poorly performing if it lagged benchmarks by an average of more than 0.5% per annum.
The poorly-performing funds were BT Super MySuper, Westpac Group Plan MySuper, Energy Industries Superannuation Scheme (EISS) Balanced MySuper, AMG Super, Commonwealth Essential Super and First Choice Employer Super.
These funds accounted for a combined 5.5% of total MySuper member accounts and APRA said around 800,000 members sat in a poorly-performing fund. However, there were 350,000 fewer than in 2021.
Meanwhile, fees and costs had fallen for most MySuper products with an estimated 8.1 million members seeing a drop in fees and costs in the past year.
Some 28 MySuper products had closed since the first heatmap in 2019 with 1.5 million member accounts being transferred to other products.
APRA deputy chair, Margaret Cole, said: “Since its introduction, we have seen costs to members reduced, many underperforming products closed, and a drop in the number of members in funds with significantly poor investment performance.
“However, there are still hundreds of thousands of members in funds with sub-par investment performance, and the industry has serious sustainability issues to address.
“APRA expects that trustees with underperforming products will consider options to transfer members or otherwise restructure their businesses, particularly where sustainability pressures are significant,” Cole said.
The research house has offered a silver lining after super fund returns saw the end of a five-month streak last month.
A survey of almost 6,000 fund members has identified weakening retirement confidence, particularly among those under 55 years of age, signalling an opportunity for super funds to better engage with members on their retirement journey.
The funds have confirmed the signing of a successor fund transfer deed, moving closer to creating a new $29 billion entity.
A number of measures, including super on Paid Parental Leave, funding to recover unpaid super, and frameworks to encourage investment in the energy transition, have been welcomed by the superannuation industry.
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