Is your super fund a star performer or a lemon? It’s a question more Australians are asking, now the Australian Prudential Regulation Authority (APRA) is publishing ‘heatmaps’ to put the blowtorch to underperforming funds.
It often starts with niggling doubts. Fees that are above the industry average, investment performance that lags its peers or an unhelpful response to your queries. You begin to wonder why you chose this super fund, if indeed you did choose it as opposed to having it chosen for you by your employer or financial adviser, and if you should switch funds.
APRA’s latest heatmap compares the returns, fees and sustainability of default MySuper products and 'choice' investment options you select yourself. Disturbingly, 45% of MySuper products and 60% of choice investment options delivered returns below APRA’s benchmarks.
The ATO has also unveiled its new YourSuper comparison tool. So far it only includes MySuper products and has limited functionality, but it’s a step in the right direction.
One positive outcome of all this scrutiny is that more people are taking a close interest in their super, often for the first time. Many have already voted with their feet and switched funds.
Where to start?
Begin by getting to know your fund, or funds if you have more than one. Your most recent annual statement is a good place to start. Is it easy to follow and useful?
Your statement will tell you how your money is invested. The names of investment options may vary from fund to fund but get to know what type of investments and investment mix you hold.
