The Australian Institute of Superannuation Trustees (AIST) has urged the Government to extend the Your Future Your Super (YFYS) performance test to all Choice accumulation super products.
Mel Birks, AIST deputy chief executive and general manager, stated it was important to test all Australian Prudential Regulation Authority (APRA) regulated accumulation products, not just MySuper ones.
This followed findings of the recent APRA Choice heatmap which found such products were higher cost and had a greater variance in performance than MySuper products on average.
Minister for financial services, Stephen Jones, announced last July that YFYS tests would not be extended for 12 months while the test underwent a review.
Birks said: “The Productivity Commission (PC) has also found that Choice products underperformed MySuper products on average and had a relatively long ‘tail’ of underperformance, which is significant given they account for $1 in every $3 in in APRA-regulated funds.
“It is important that the worst areas of underperformance in the super system are addressed by including all products in a performance assessment.
“This is also consistent with the PC’s view that all products should have simple and comparable dashboards and performance requirements.”
She argued in favour of a consistent, accessible, comprehensive and simple performance test to enable members of Choice products to properly assess their performance.
In late 2022, APRA chair Margaret Cole noted the Government had begun a review of YFYS laws and warned the spotlight on performance tests would “only get more intense.”
The test remained under review by the Treasury alongside advisers, economists, academics, and not-for-profit super funds as part of a broader review of YFYS measures.
