Minister for financial services, Stephen Jones, has confirmed the annual performance test is “here to stay”.
Speaking at the Sydney Institute, Jones discuessed the annual performance test which was currently subject to a review by himself to uncover any unintended consequences.
It had been introduced in 2021 to protect MySuper fund members from poor outcomes and was run by the Australian Prudential Regulation Authority (APRA).
Last September, it was announced that Jones would review the Your Future, Your Super measures which covered the performance test, YourSuper comparison tool, stapling and best financial interest duty. Some 75 submissions were received from the industry providing feedback on the consultation.
While no date was scheduled for the release of its findings, Jones said he would have something to share “shortly” but that he could confirm the test would remain in place.
He had previously shared the expansion of the performance test to Choice products as well as MySuper ones would be paused until the review was completed.
“Stakeholders have expressed a range of views. And we will have more to say on next steps shortly,” he said.
“But let me be clear. The performance test is here to stay. It would not be consistent with the objective of superannuation to remove the performance test.
“Just as governments will be held to account when the objective of superannuation is legislated so trustees will continue to be held to account for their performance with members’ funds.”
Meanwhile, he also touched on the objective of super which released its consultation into a possible objective earlier this week.
The favoured proposal put forward by the Government was: “The objective of superannuation is to preserve savings to deliver income for a dignified retirement, alongside government support, in an equitable and sustainable way”.
Jones particularly noted the wording about ‘preserve savings’ and said preservation laws regarding super were akin to applying sunscreen on the beach and would have long-term consequences if it was ignored.
“Without preservation, it is like forgetting to apply sunscreen for a day at the beach. It may seem like nothing more than a short term oversight, but it comes back to hurt in the long run. It is a costly decision as members retire with less. And it increases the likelihood of them needing additional government support.
“It’s about ensuring that superannuation policy is guided by a true north. That the custodians of the system – the government, the regulators, the trustees – are held to account for their decisions. So that there is certainty.”
