Aussies are being urged to switch superannuation funds, especially those whose MySuper products failed the recent performance test.
The Australian Prudential Regulation Authority (APRA) has made the call after it found only 7 per cent of Aussies who were told their super fund failed the test actually switched funds.
APRA released the results of the first annual performance test of MySuper products on 31 August.
Of the 76 products assessed, 13 failed and MySuper was forced to write to members notifying them of the results.
From the 1 million member accounts in products that failed the test, fewer than 68,000 had been closed, APRA said.
That accounts for 7 per cent of total accounts in the failed products, and only about $2.2 billion in assets.
APRA said it was working with the trustees of the failed products to ensure they urgently improved their performance, or encouraged them to merge with more “sustainable funds”.
"The trustees of APRA-regulated superannuation funds have a legal duty to act in the best financial interests of their members, and APRA is working hard to ensure they fulfil that obligation," APRA executive board member Margaret Cole said.
"That’s not a reason for members to sit back and avoid taking steps to act in their own best financial interests by ensuring they are in a high-performing super product.
“Research shows that the difference in outcomes between a top product and an underperforming one can amount to hundreds of thousands of dollars over a working life.”
What should you do if you’re in an underperforming fund?
There is plenty of information available to help you, should you want to change super funds.
For those members with their savings in choice products, APRA will release its first Choice Product Heatmap next month, which will deliver insights on the performance of a large segment of the choice market.
At the same time, the next MySuper Product heatmap will include the performance test scores of every product assessed.
"Increased transparency is a powerful tool for regulators to bring about improvements in superannuation fund performance, but members should never forget they also have the power to make decisions that will better secure their future in retirement,” Cole said.