The regulator looked at 76 MySuper products with at least five years of performance history and measured them against an objective benchmark. If found 13 products failed to meet that benchmark.
MySuper products are default accounts an employer can use for an employee if they haven’t nominated a preferred fund.
APRA’s Executive Board Member Margaret Cole said those underperforming products – which account for about 7% of Australia’s total 14 million MySuper members – now face an important choice, ahead of any retesting next year.
“They can urgently make the improvements needed to ensure they pass next year’s test or start planning to transfer their members to a fund that can deliver better outcomes for them,” she said.
Trustees of the MySuper products that did not pass the test are required to write to their members by 27 September 2021 to advise them of their performance test outcome, and their options to changing to another product. The list of underperforming funds is available on the APRA website.
If your super is currently in one of these underperforming products, you might be thinking about swapping to a new fund. Here’s a simple step-by-step guide to switching.
How to change your super fund
Changing your superannuation fund is a relatively simple procedure, as Australian Government reforms allow people to manage their super more easily via the my.gov.au portal.
But first, there are a few variables you might like to consider, according to the Australian Government’s Moneysmart advice on consolidating super funds:
Employer: Check with your employer to see if changing your super fund could impact the amount they contribute to any new fund you are considering. If you do decide to change funds, you’ll also need to notify your employer so they can pay contributions to your chosen account.
Insurance: Check how much and what type of insurance cover is provided by your current super fund.
Super fund: Check if you are able to transfer your super to another fund. Some funds and accounts have rules that may prevent you from transferring your money.
Also, find out if you are in an accumulation or defined benefits fund. Moneysmart says if you are in a defined benefit fund, you may like to get professional advice as once you leave a defined fund, you may not be able to rejoin.
“Some funds are very generous, so make sure you’ll be better off,” says Moneysmart.
If you decide that switching super funds is the right move for you, here’s what you need to do:
Step one: Choose a new super
Choose a new superannuation fund and open an account. When choosing a new super account, you need to look at all the options to make sure it is one that suits your needs. Be careful to check things such as the funds’ performance over time, what fees they may charge and the level of service and support on offer to members. For an idea of which funds are offering overall value across a range of factors, you could also consider Canstar’s Superannuation Star Ratings and Awards.
→ Read more: How to choose a super fund
Step two: Notify your employer
To make sure funds go into that new account, you need to inform your employer. The Australian Tax Office (ATO) has a superannuation standard choice form that must be completed by both you and your employer.
Optional step three: Consolidate you super funds
If you have several super funds and would like to consolidate them into one, then you need to move your existing funds to your new super account.
There are three ways this can be done:
- Use the myGov online portal. To do this, you will need to sign in to (or create) an account. Once signed in, if you have not already done so, link the ATO’s online service to your account via the “Link another service” option. Go to the ATO portal, then go to the “Check Super” menu. If your new account has registered with the ATO (this could take some time), a “Transfer super” menu option will appear. You should be able to use this to consolidate your super funds.
- Ask your new super fund to consolidate the funds for you.
- Use the ATO’s rollover or transfer of super benefits services. There is an online option or you can download and print paper versions of the forms you need.
There are two forms: one is for standard superannuation funds and the other is for self-managed super funds (SMSF).
Consider the pros and cons
Changing super funds may affect your financial future so you may want to consider seeking professional financial advice before doing anything and weigh up the pros and cons very carefully.
Association of Superannuation Funds of Australia (ASFA) CEO, Dr Martin Fahy, told Canstar that consolidating multiple super accounts can make sense for many people.
“However, some people choose to hold more than one super account to boost their insurance coverage or diversify their investments across funds,” Dr Fahy said.
“There’s no one-size-fits-all solution when it comes to super. ASFA recommends talking to your super fund about what’s right for your individual needs.”
You should also consider seeking some independent financial advice.
When considering a new fund, there are many factors to consider, such as the fees charged, whether the insurance offering is suitable for you. The ATO says to look at the potential loss of any benefits from leaving your existing fund.
Past performance is an important consideration because it gives an indication of what a fund has been capable of delivering in the past through varied market conditions. But investments can go up and down, so past performance is not necessarily indicative of future performance.
Compare Superannuation with Canstar
The table below displays some of the superannuation funds currently available on Canstar’s database for Australians aged 30 to 39 with a super balance of up to $55,000. The results shown are sorted by Star Rating (highest to lowest) and then alphabetically by provider name. Performance figures shown reflect net investment performance, i.e. net of investment tax, investment management fees and the applicable administration fees based on an account balance of $50,000. To learn more about performance information, click here. Use Canstar’s superannuation comparison selector to view a wider range of super funds. Canstar may earn a fee for referrals.
Fee, performance and asset allocation information shown in the table above have been determined according to the investment profile in the Canstar Superannuation Star Ratings methodology that matches the age group specified above.
Would you like to know more?
Here are some articles that may provide information to help you when considering swapping your super:
Knowledge centre: Go to Canstar’s superannuation hub page for more
Cover image source: Phonix_a Pk.sarote/Shutterstock.com