We build up savings in our superannuation funds in order to secure our own future, as it is designed to help prepare for retirement. On Tuesday, the Australian Prudential Regulation Authority (APRA) released an analysis of which Australian super funds on the government’s MySuper products listing are performing poorly (this excludes Self-Managed Super Funds). Only funds with MySuper licences can act as default fund for super contributions, and they are meant to be simple to understand, and low cost.
This recent article (see link below) was recently released by Business Insider. APRA, through its “heatmap” tool, discovered and revealed that more than 1/5 of all default funds are underperforming.
With this news, it is advisable for you to consider checking on the performance of your super fund. Is your choice of super fund a good one? Are you charged with fees which are much higher than your fund’s competitors?
Take note that you can compare your existing superfund to others through Canstar, at https://www.canstar.com.au/superannuation/. In our recent 2019 Super Seven Webinar series, organized by IN8 Business Advisory / Ban Tacs Brisbane in collaboration with Ban Tacs Financial Solutions, Colleen and Monika illustrated how you can make a comparison of super funds, using the Canstar tool. See webinar here:
It’s your super, and your financial future. Make sure you are invested in the right super fund. It’s not ideal to be shifting your super savings to another fund on a whim, or on the basis of one piece of information, or one bad year. However, a 1% difference in returns or 1% in fees can make a big difference over a number of years.
Notwithstanding their classification as underperformers, APRA is giving the underperforming funds reasonable time to make substantial improvements, or perhaps merge with other funds. The APRA heatmap is putting the heat on the MySuper list to be more accountable and to lift their game. If this type of analysis starts to make super more transparent to Australians, then it seems like a good thing.
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