OLIVER PETERSON:
Data from the first annual performance test of the Australian superannuation funds has now been loaded into the Australian Tax Office's Comparison tool. On the line is the Minister for Superannuation Financial Services and the Digital Economy. Jane Hume. Good afternoon.
JANE HUME:
Great to be with you, Oly.
OLIVER PETERSON:
How are our super funds performing overall?
JANE HUME:
Well, overall, the Australian superannuation system has served Australians very well, but there are pockets of under performance. And today is a really big day for super members and for Australia's future retirees because new performance data has been published on the ATO's, YourSuper comparison tool, which will allow members to identify those funds that didn't meet their performance benchmarks, that didn't deliver to members what they promised. So some super fund members are going to be in for a bit of a shock, that what was written on the box of their fund, really, it wasn't what was delivered.
OLIVER PETERSON:
Well, that's it. 76 of these super funds have been reviewed on this tool. 13 funds simply don't pass the test, Minister.
JANE HUME:
No, that's exactly right. And we're really hauling that performance of those super funds out of the shadows and into the bright sunlight of accountability. And it's going to be a little uncomfortable for some. But those super funds are going to have to notify their members that they've underperformed and direct them to YourSuper comparison tool at the ATO so that members can choose potentially to find a fund that might better suit them.
OLIVER PETERSON:
That's going to be rather embarrassing, isn't it? Basically putting up your hand and telling your members here, look, we're underperforming. What does the benchmark of an underperforming product, how do you assess it, Minister?
JANE HUME:
Well, they access it themselves. The benchmark is based on their own asset allocation, but it also takes into account investment fees and administration fees. So if they want to improve their performance, they can lower their fees. That's one of the reasons why we've put this performance test in place, because it puts that competitive pressure, that downward pressure on fees in the future.
OLIVER PETERSON:
So we're talking here about 13 funds, again, that are underperforming how many accounts and how much money is this worth to Australians?
JANE HUME:
Well, it's over $50 billion in these accounts, and it's around 1 million accounts. So there's going to be a lot of people that get those letters over the next month to tell them that their fund is under performing and to direct them to the online YourSuper comparison tool at the ATO website so that they can find a better fund.
OLIVER PETERSON:
Sometimes you hear about how difficult it is just to simply change funds. I say it is simple, but in actual fact, it's a little more complicated than that. If anybody is listening to our conversation this afternoon and thinking, Well, first of all, I want to check to see whether or not my superannuation fund is underperforming, how do they go and do that. Then secondly, how do they go about changing superannuation funds if they're not happy?
JANE HUME:
Actually, it's much simpler than you think. That online comparison tool, YourSuper comparison tool at the ATO website, will show all the MySuper products there the default products that have been assessed for performance. And you can compare your fund to those funds on all sorts of measures. Not only that, but each one of those funds has a link to the Superfunds website. So you can actually switch and rollover your fund to another fund very easily, just a couple of clicks. Most importantly, a lot of people have duplicate accounts out there and the ATO website allows you to, with just a couple of clicks, consolidate your accounts into one fund. So you only have one set of fees, one set of insurance premiums, which is so much more efficient.
OLIVER PETERSON:
So it's probably worth going to cheque things out. Simply log into your account through the ATO website. Go and do that this afternoon and see if your fund passes the test, Minister.
JANE HUME:
That's exactly right. It can save you thousands and thousands of dollars in your retirement.
OLIVER PETERSON:
Jane here, I appreciate your time. Have a good afternoon.
JANE HUME:
It's great to be with you.