YFYS does not address retail super funds’ underperformance
The Government’s proposed Your Future Your Super (YFYS) legislation stops short of addressing the underperformance across the superannuation sector, the Australian Institute of Superannuation Trustees (AIST) believes.
AIST pointed to data from the Australian Prudential Regulation Authority (APRA) released this week that found over the five years to December 2020, profit-to-member super funds, on average, outperformed retail funds by 23%.
AIST chief executive, Eva Scheerlinck, said this concentrated retail fund underperformance needed to be urgently addressed by the government and regulator.
She said the YFYS legislation stopped short of this as it only prescribed the annual performance test to default MySuper products, which on average tended to perform better.
“A one or two percentage differential in annual investment returns has a huge impact on the financial outcome for members in retirement,” Scheerlinck said.
“It should be legislated that every super product is subject to annual performance testing. Any exclusion simply lets underperforming funds escape scrutiny and eats away at member returns.”
Recommended for you
Treasurer Jim Chalmers has handed down his third budget, outlining the government’s macroeconomic forecasts and changes to superannuation.
Online investment adviser and fund manager Stockspot has introduced Stockspot Super, Australia’s first 'ETF only' superannuation product. superannuation product.
ASIC has called on superannuation funds to improve their oversight of advice fee deductions following an investigation of 10 trustees that found $990 million was charged in one year.
With just 30 per cent of Australians knowing their superannuation balance to the nearest $1,000, Findex has emphasised the role of financial advice in addressing the critical super knowledge gap.