The fund has passed APRA’s performance test, despite its MySuper option delivering below-median returns across multiple timeframes in FY25.
Rest has confirmed its MySuper product passed APRA’s Annual Performance Test for the year to 30 June 2025, despite delivering below-median returns relative to peers across several investment horizons.
In its annual member outcomes assessment, the $98.5 billion profit-to-member super fund said its MySuper Growth option delivered a net return of 9.58 per cent for the 2024/25 financial year and met its stated investment objective of CPI plus 3 per cent per annum over rolling 10-year periods.
While the one-year return represented a strong absolute outcome, Rest acknowledged the result ranked below the MySuper median, attributing the relative underperformance to short-term weakness in Australian equities.
Growth’s annualised net returns were also below the MySuper median over three-, five- and 10-year periods.
Rest said this reflected its comparatively lower allocation to growth assets, noting that almost 40 per cent of MySuper products held higher growth exposures, which had benefited returns during periods when growth assets dominated market performance.
When assessed against products with comparable growth asset allocations of between 61 and 80 per cent, Rest said Growth’s five-year performance improved to just below median, ranking 18 out of 31 options.
Over the longer term, the option’s 20-year annualised return ranked above the median.
Despite the relative return profile, Rest concluded member financial interests were promoted, emphasising that APRA performance test outcomes were not assessed in isolation but considered alongside fees, investment risk, insurance, scale and operating costs.
The report said total MySuper fees and costs were marginally lower than the industry median, driven by lower total investment costs, although administration fees and costs were slightly higher than peers.
According to the fund, the basis for fee-setting appropriately balanced the impact on retirement outcomes with the long-term sustainability of the fund.
The assessment also found the investment strategy underpinning the MySuper option, including targeted risk and return levels, remained appropriate for the fund’s predominantly younger membership base, with around half of members under the age of 30.
Beyond MySuper, all applicable Choice super products in Rest Super and Rest Corporate also passed APRA’s Annual Performance Test in 2024/25.
Over the five-year period to 30 June 2025, six of eight Choice super options delivered above-median net returns, with Growth sitting just 0.04 per cent per annum below the peer median.
For Choice pension products in Rest Pension, the trustee found eight of nine options delivered above-median net returns over five years, with fees and costs generally lower than peer medians, supporting the conclusion that member financial interests were promoted.
Insurance was also considered as part of the assessment, with Rest concluding insurance fees across MySuper and Choice products did not inappropriately erode members’ retirement income.
The fund said insurance pricing was generally competitive and followed a life-stage approach, with a comprehensive review completed in 2024 to reflect changes in member demographics.
Rest also pointed to its scale, positive member growth and ongoing net cash inflows as contributing to a downward trend in operating cost ratios.
The trustee said this scale enhanced access to higher-quality investment opportunities, improved diversification and strengthened its ability to negotiate lower investment fees and more favourable terms.
