Being stuck in an underperforming superannuation fund can cost the average worker up to $500,000 in retirement balances, according to the Productivity Commission.
Finding out whether your fund is a winner or a laggard can be difficult for the uninitiated. However things just got a bit easier after the Australian Prudential and Regulation Authority released what it calls a ‘heat map’, in which the regulator identifies how well the 97 funds authorised as default or My Super products are performing.
To make it even more straightforward, The New Daily is publishing the top and bottom 10 performers to give readers a heads-up on whether they should celebrate or look for a new fund. If you relied on your employer to choose your super fund and it is not listed here, you can go to this link and find it on the APRA document.
Of the top 10 performing funds, eight were industry funds with the top performer being Hostplus over five years to June 30 2019. One, Goldman Sachs JB Were, was a corporate fund run for the merchant bank’s employees and one, Tidswell Max Super Fund, was a retail or for-profit fund.
Of the ten worst-performing, seven were retail funds and three, Christian, Maritime and Energy, were industry funds.
APRA also looked at how much funds were charging members to manage their money with the 10 highest charging funds listed below. They were equally mixed between industry and retail funds with two corporate funds, Qantas and Goldman Sachs, listed as well.
The APRA heat map is part of the regulator’s agenda to force small and underperforming funds to merge or close down. Superannuation minister Jane Hume recently told a superannuation conference as many as half of all super funds could disappear through mergers or closures.
The Productivity Commission [PC] found approximately half of all APRA [Australian Prudential Regulation Authority] regulated funds had less that $1 billion in assets – many of which consistently underperform.
“If you’re sub-$1 billion you want to start thinking about your future,” she said.
APRA has already begun to pressure funds it sees as underperforming.
“We directly contacted the trustees of the worst-performing products and asked them to provide or update action plans outlining how they will address identified weaknesses. If they are unable to make substantial improvements in good time, we will consider other options, including pressuring them to consider a merger or exit the industry.”
“However, no-one should be complacent. We expect all trustees to use the heat map to reflect on the drivers of their current performance, and identify where they can do better,” APRA said in a release.
The New Daily is owned by industry Super Holdings.