IT sounds better than default super fund, or the fund-you-get-put-into-if-you-don’t-choose-a-super-fund-yourself, but that’s what MySuper is.
Unless you choose your own fund, every working person’s superannuation contributions go into a MySuper fund.
In a way, MySuper describes the super funds for people who are not (yet) interested in super.
For the first time ever, there has been a MySuper Product Performance Test.
The Test assessed seventy-six MySuper funds.
This means thirteen funds are collecting fees from workers while the fund is doing a bad job.
Those thirteen funds need to urgently improve or merge with a MySuperFund that passed the Test.
Merge, it seems, is what the response is going to be. Mergers of super funds have been very common in the lead-up to the big MySuper Test.
This will just speed up what was already happening. The number of superannuation funds in Australia has halved from 389 to 179 in the past decade.
The MySuper Test is simply part of regulatory and political pressure on super funds to merge to address lack of scale and the accompanying underperformance.
Apart from better investment returns for fund members, fund mergers also lead to significant fee savings, by an average of almost 20 per cent according to some estimates.
Interestingly, most of the mergers that have taken place involve industry funds.
While retail funds will remain very large players, they aren’t growing at the same rate as the biggest industry funds.
The MySuper funds that failed the first annual performance test are:
- AMG MySuper
- ASGARD Employee MySuper
- AvSuper Growth (MySuper)
- BOC MySuper
- My Ethical Super
- FirstChoice Employer Super
- Accumulate Plus Balanced
- Balanced (MySuper)
- MySuper Balanced
- MySuper Investment Option
- BT Super MySuper
- VISSF Balanced Option (MySuper Product)