More than 66,000 Australian workers will be notified that their superannuation fund has underperformed after BUSSQ, a Queensland-based construction industry fund, failed a key performance test set by the Australian Prudential Regulation Authority (APRA). BUSSQ's default MySuper product was the only one among 50 assessed to not meet the regulator's benchmark.
The APRA annual performance test results, released Friday, assessed 547 products and covered 61% of member benefits in APRA-regulated superannuation funds. BUSSQ's MySuper product returned 5.89% for the year ending June 30, falling short of the 9.5% median return for growth funds. The fund's performance was impacted by a significant allocation to cash and fixed income.
As a result of failing the test, BUSSQ must inform its affected members. If the fund fails the test again next year, its MySuper product may be barred from accepting new members.
Super Consumers Australia chief executive Xavier O'Halloran expressed concern that retirees invested in BUSSQ's equivalent retirement product are not receiving the same performance warnings. He stated that retirees should have the same protections and information as those still contributing to their superannuation.
BUSSQ chief executive Damian Wills acknowledged the result and stated that the fund has already implemented changes to its investment strategy. These changes include removing underperforming investment managers and increasing exposure to indexed equity mandates.
In addition to BUSSQ, 11 trustee-directed products from major wealth platforms also failed the test. These included products from MLC and AMP, both owned by Insignia Financial, and the Bendigo Superannuation Plan, owned by Betashares. Five of these products have now failed the APRA performance assessment for two consecutive years. APRA identified poor investment performance, rather than high administration fees, as the primary reason for these failures.
The results also highlighted top-performing funds, with UniSuper Growth leading the list with a 12.3% return for the same period. NGS Super Diversified and CFS FirstChoice Growth followed with 11.5% returns, and Hostplus Balanced achieved 10.8%. PSSap MySuper Balanced delivered 10%, and Vanguard Super SaveSmart Growth returned 9.8%.