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Super fund performance test to be finetuned
The Albanese Government has released its review of the Your Future, Your Super laws to address unintended consequences of the performance test deemed not in the best interests of fund members.
The government announced it will fine-tune the performance test for superannuation funds by:
- Prospectively increasing the testing period from eight to ten years to encourage longer-term investment decisions
- Calibrating key benchmarks to ensure that funds are not unintentionally discouraged from investing in certain assets
- Adjustments to the notification letter that trustees of failed products send to members
- Ensuring the test is fit-for-purpose when it is extended to trustee-directed products this year.
Assistant treasurer and minister for financial services Stephen Jones said in a release the government will consider other changes that may be necessary to improve fund performance.
With the performance test to apply to trustee-directed products for the 2023 financial year, choice and values-based products are also set to come under the spotlight.
“The existing test may not reflect the diversity and objectives of choice products. At the same time, it remains important that funds are held accountable for underperformance in the choice sector,” said Jones.
