Skip to main content

Your Future Your Super Organisations Fail to Meet Basic Benchmarks

 

As apart of APRA’s new legislation, MyGov Superannuation funds are now under investigation for failing to meet basic benchmarks of performance.  Also, with some household funds name and shame. And here is how your Super may have affect:

MySuper – The Default Super

Anyone who has worked part-time as a glassy over the uni holidays or casually in a pizza shop probably has a MySuper account. The MySuper institutions are essentially the ‘default’ superannuation funds. That is elect for people if they have not nominate their own retail or industry fund.

Host Andrew Baxter says that most people who are effectively oblivious to super are typically the ones who hold cash in MySuper organizations. Also, given it had been provided to them by default. This is scary in itself. However, it was the performance of these that really struck a chord with us.

APRA’s Performance Results

The Australian Prudential Regulatory Authority (APRA) investigated 86 of the MySuper organizations as per the new legislation imposed in November 2020. Here, they conducted a basic benchmark performance test. To ensure these funds were up to scratch given they hold around $900B of everyday Australian’s retirement funds. Scarily, 13 out of the 86 funds failed to meet industry standards. Regardless, leaving over 1 million Australians affected. And equated to $56B of funds performing below par.

To put this into perspective, APRA’s ‘benchmark’ return on Australian Equities over an 8-year period had to average 7.88% net of fees. In order to fail this particular asset class. These MySuper funds would need to underperform by greater than 0.5%. And leaving the average 8-year return to anything less than 7.33%. As what is a record high stock market. Also, This is simply not okay and now means that any shamed underperformer has to contact shareholders to let them know they ‘messed up’. In what were low benchmarks anyway. And 13 funds couldn’t simply get their act together over 8 years.

What to Do if you are One of Those Affected

By law, any of the 13 funds that have fail to meet basic performance standards. Probably, are now obligate to convey this to their shareholders. So, what do you do if you are of the unlucky people who receive an email or letter in the mail about this? Host Andrew Baxter talks about the need for financial literacy in the case of superannuation.

As something that most Aussies are disengage with given retirement is something so far down the line for most. It is now an industry that the curtain is lift  on so that every day people can secure their nest egg for the future. And Super is no laughing matter. So if you do happen to hold money in of these 13 funds – do some research, get educated.  And get it moved over somewhere better. Also, Chances are you probably have super sitting with a number of different funds – in the essence of fees. And make sure you get these consolidated into one fund of your choice for optimal performance. 

Choosing the Right Fund for You

The question arises, how do you know which fund and asset class is best for you? Well, this will depend largely on your age and risk appetite. If you’re early 20’s and are happy to undertake risk to grow your nest egg. Also, investing in a bonds or cash fund probably isn’t the best idea. Versus if you’re in the transition to retirement phase. And having your money sitting in a leveraged equity fund. Probably isn’t the smartest idea either.

Host Andrew Baxter says undertaking a ‘fact find’ and risk assessment are good places to start. And are things his team can assist you with at Australian Investment Education to get you started. Despite superannuation and retirement being many moons away for most. It is something you needto be on top of to secure your financial future. Reach out if you need a hand.

Comments

Popular posts from this blog

Success Secrets of Millionaires: Learn from Andrew Baxter's Habit Guide

  If you're aiming to build real wealth, discipline isn't optional—it's essential. Becoming a millionaire goes beyond buying stocks or investing in real estate. It starts with how you think, what you do daily, and how consistently you show up. Start With Discipline: The Foundation of Wealth Building Discipline is the core habit behind long-term success . It’s not about talent or luck—it’s about consistency. Most self-made millionaires developed their wealth by doing what needed to be done, even when it wasn’t easy or convenient. You don’t need to overhaul your entire life to become more disciplined. Start small. Make your bed. Keep your workspace clean. Exercise regularly. These micro-habits build the momentum needed for bigger changes down the road. Daily Habits Matter More Than Big Goals Real success doesn’t come from dramatic lifestyle shifts—it comes from small, intentional actions repeated daily. The key is to show up, follow through, and stay consistent. When discipl...

Understanding Interest Rate Cuts: How They Affect You, the Market, and Insights from Andrew Baxter

  Interest rates play a crucial role in shaping various facets of the economy, influencing loan costs, housing markets, and consumer spending patterns. Recent fluctuations in interest rates , particularly in countries like the United States and Australia, have sparked discussions about their potential impact on economic conditions in the near future. Analyzing Interest Rate Cuts: Benefits and Drawbacks Australia’s recent decision to reduce rates by 25 basis points marks the first cut in recent years, igniting significant debate over its implications. Homeowners with variable-rate mortgages stand to gain, but there are fears that the cut may be excessive. For mortgage holders, this decrease could facilitate faster debt repayment and enhance their ability to spend. Conversely, many Australians without mortgages may not experience any direct advantages from this change. On the downside, retirees who depend on interest income from bank deposits are likely to face reduced returns. Rate ...

Australian or U.S. Stocks: Which Delivers Better Returns? | Andrew Baxter Insights

  In today’s fast-changing market landscape, knowing where to invest your money has never been more critical. Both the Australian and U.S. stock markets offer unique advantages, but understanding their differences can give investors the confidence to make more informed decisions. This article explores key distinctions, market trends, and essential factors to help guide your investment strategy. The Power—and Pitfall—of Local Bias Australian investors often gravitate toward domestic equities, and for good reason: there’s comfort in familiarity. Local companies are household names, operate in a shared timezone, and are heavily weighted in Australian-managed funds. This can create a home-country bias that leads to an overweight in Australian stocks. However, Australia's market represents less than 2% of global equities, while the U.S. accounts for nearly 45%. A globally balanced portfolio should reflect that reality—though in practice, many portfolios fall short. Performance Snapshot:...