Super funds and the risk of failing an APRA performance test

Trustees of superannuation funds need to closely monitor how much investment risk they are taking relative to the benchmark to be used in the APRA performance tests for MySuper products from 1 July 2021. In a recent article, Tim Unger, Senior Director of Investments at Willis Towers Watson, warns that there is an increased probability of funds failing the test when assessed over a longer period.

Superannuation trustees will be required to notify members by 1 October 2021 if their fund fails an APRA performance test under the Your Future Your Super (YFYS) reforms implemented by the Treasury Laws Amendment (Your Future, Your Super) Act 2021. A fund will also be prohibited from accepting new members into that product if fails the performance test for 2 years in a row.