The Australian Government's Your Future, Your Super laws came into effect on 1 July 2021.
The new laws introduced an annual performance test for all superannuation funds that offer a MySuper product. The annual performance test for this year assesses the returns of MySuper products (after the deduction of fees) over the last 7 years. The test compares the returns of our MySuper product with the returns that a comparable product would have delivered over the same period.
On 30 August 2021, we received a notification from APRA, the superannuation regulator, that our LifetimeOne MySuper product has not passed the annual performance test. You should take that into account in considering whether to invest, or remain invested, in this product.
Please note, the test combines the performance of our current MySuper option LifetimeOne (introduced in May 2018) and the previous MySuper option, Conservative Balanced.
Australian Catholic Superannuation is a sustainable platinum rated superannuation fund with award winning products and services. We continue to support members in all aspects of their superannuation, retirement planning, insurance and financial planning.
We hope the below FAQ will assist with any queries or concerns members may have with the Government test. If you have a specific question, we encourage you to contact us on 1300 658 776 or via email@example.com.
Questions you might have
What is the performance test?
The test assesses the returns of MySuper options (after the deduction of fees) over the last 7 years. The test compares the returns of our MySuper option with the returns that a comparable option would have delivered over the same period.
In the past, we have acknowledged underperformance in the Conservative Balanced option. This was the instigation for the Trustee to introduce LifetimeOne in May 2018. We are pleased to note that LifetimeOne is achieving its intended investment objectives as disclosed in our PDS.
Unfortunately, the APRA performance benchmark includes the performance of our previous MySuper option for part of that 7-year period.
Does the performance test relate to the entire fund investments?
No. This year the test only relates to the Fund’s default option, LifetimeOne.
What does it mean for members in LifetimeOne?
The performance test has been designed to allow members in options that the Government has deemed “underperforming” to be informed and make their own independent choice on their superannuation moving forward.
For members in LifetimeOne, it’s important to consider your choices. The ATO YourSuper comparison tool provides a holistic view of all MySuper options available. A reminder that the comparison tool has 3 year returns (these relate to LifetimeOne), and 5 year and 7 year returns (these relate to the combination of LifetimeOne and Conservative Balanced), which we encourage you to review.
Is there more information about LifetimeOne?
LifetimeOne was created in 2018 to enable members to have different exposure to growth and defensive assets as they age. As a member approaches retirement, the option automatically becomes more defensive to help protect member’s superannuation savings from market fluctuations.
Each member will have a specific investment return due to the nature of LifetimeOne. The returns below, however, give an indication for each age bracket.
Option 1 year to June 2021 3 years to June 2021 LifetimeOne 40 and below 20.88% 8.29% LifetimeOne 45 19.11% 7.86% LifetimeOne 50 17.36% 7.42% LifetimeOne 55 15.61% 6.99% LifetimeOne 60 13.87% 6.55% LifetimeOne 65 11.61% 6.09% LifetimeOne 70 and over 9.40% 5.63%
Source: The returns above have been taken from the SuperRatings Default Option survey. This survey compares fund’s default investment options no matter percentage of growth assets in each option. Returns are net of investment fees, tax and implicit asset-based administration fee. Explicit fees such as fixed dollar administration fees, exit fees, contribution fees and switching fees are excluded.
How does a member find their specific investment return?
Members can look at their 2020/2021 Annual Statement to see their returns.
Additionally, members can login to the member portal and check their returns at any time.
Does this mean the Fund has to shut down?
No. The Fund continues to support members into the future.
What is the Fund’s plan for the future?
We continue to pursue our strategy of seeking increased scale in order to remain competitive in this changing landscape with the aim of providing our members with better products and improved services and economies of scale.
Are there additional resources I can read about the test?
There have been many different viewpoints from the media on the performance test. Below are a few articles from various different publications.
Has the government created a comparison tool?
Yes. The Australian government has created a comparison tool to enable members to compare different MySuper options.
You can find it here.
Please note: As our default, LifetimeOne, was introduced in 2018 the returns in the tool for 3 years relate to our current product. The 5 and 7 year numbers relate to our previous default.
What should a member consider before taking any action?
- 1. Visit the YourSuper comparison tool and compare a fund’s performance and fees with other funds. NB: The returns for LifetimeOne since its inception in May 2018 have been very competitive against other performing MySuper options.
- 2. Check investment returns on your Annual Statement. These give an idea of your returns as a percentage and a monetary figure.
- 3. Consider insurance cover as switching funds can have a significant impact on your insurance benefits.
- 4. Understand the exposure to growth assets (risk) that other products have and making sure members are comfortable with the risk/return trade off.
- 5. Contact the fund office to speak with one of our call centre staff, regional managers or limited advice specialists at no additional cost to discuss any questions you may have in relation to the performance test or your account more generally.
What should members who are happy with the Fund do?
Australian Catholic Superannuation will continue to support members into the future. We are proud of our award winning insurance, member education and ongoing commitment to helping members of all age with their superannuation.
You do not have to make any changes as a result of this information if you don’t want to.
Any advice contained in this document is of a general nature only, and does not take into account your personal objectives, financial situation or needs. Prior to acting on any information in this document, you need to take into account your own financial circumstances, consider the Product Disclosure Statement and Target Market Determination for any product you are considering, and seek independent financial advice if you are unsure of what action to take. The material contained in this document is based on information received in good faith from sources within the market and on our understanding of the legislation at this time. Past performance is not a reliable indicator of future performance.