Performance Test and YourSuper Comparison Tool FAQs

We’ve put together some frequently asked questions (FAQs) about the new performance test, and the YourSuper comparison tool available on the Australian Taxation Office website. If you have a question that we haven’t answered here, please contact us.

 

What is the performance test?

The performance test (also called the Annual Performance Assessment) is a new test for super funds that was introduced on 1 July 2021 as part of the government’s Your Future, Your Super reforms.

In 2021, My Super products were assessed versus various benchmarks, for the 7 year period ending 30 June 2021. In future years, the performance test will also apply to many Choice products and will be extended to an 8 year period.

Superannuation products are either assessed a ‘performing’ or ‘underperforming’ under the test.

 

How is the performance test ‘performing’ or ‘underperforming’ rating calculated?

The performance test has two components: average investment returns (net of investment costs and taxes) over a multi-year period versus a benchmark, and the administration fees for the last financial year versus a benchmark.

If on adding the two numbers, the MySuper product is more than 0.5% below its overall benchmark, it will be assessed as ‘underperforming’ that year.

 

Why did Christian Super’s MySuper product underperform in the 2021 test?

We have a more diverse range of members invested in our MySuper product than many other funds and have therefore historically taken a more defensive investment approach, which means we took less risk and worked to minimise investment losses for our members. This approach reflects risk-return investment theory and was made by analysing the way our members respond to market volatility.  As well as this more defensive approach, there was also a degree of underperformance in some areas of our investment strategy, which we have addressed.

 

How will Christian Super’s MySuper product perform in the 2022 test?

In response to a changing economic and regulatory environment, we made some important changes to our investment strategy a few years ago, increased the amount of growth assets in our MySuper product, and made improvements in manager performance. Our short term investment performance is strong compared to other super funds and relative to the benchmarks used for the performance test.

It is too early to say whether our MySuper product will be assessed as ‘performing’ or ‘underperforming’ in the 2022 performance test, both scenarios are possible.

 

If a MySuper product does not pass the performance test, will the super fund have to close?

If a product is assessed as ‘underperforming’ two years in a row, the product will be closed to new members until the product is assessed as ‘performing’ in a future year. The super fund does not have to close as long as it can continue to promote the best financial interests of its members.

If this were to happen, existing members could remain invested in the MySuper product and could continue making contributions. However any new members who joined the fund could only invest in a non-MySuper investment option.

 

What is the YourSuper comparison tool?

The YourSuper comparison tool has been designed to help people compare the current fees and recent investment performance of MySuper products. You can read more about MySuper products here.

Note that the tool only contains information about MySuper products, which may not be relevant for members who invest in a non-MySuper product. You can view the investment returns for all of our non-MySuper investment options on our website.

 

Why are some MySuper products labeled ‘underperforming’ in the YourSuper comparison tool?

Any products with an average annual return more than 0.5% lower than its performance test benchmark (after deducting historic investment fees and costs and current administration fees), will be listed as ‘underperforming’ on the YourSuper comparison tool.

 

Why are Christian Super’s fees higher than some other super funds in the YourSuper comparison tool?

While the YourSuper comparison tool compares the differences in MySuper fees, it doesn’t take into account the additional services, features or benefits that super fund members are getting for those fees. In other words, the tool compares relative fees but not relative value for money.

Our aim is to keep fees as low as possible, while still providing a helpful and distinctly Christian service to our members. We focus on providing value for money rather than trying to be a low-cost fund that offers limited services to members. Other funds may have a different approach, which is why fees can vary.

For example, many super funds outsource their call centre to an external provider. Sometimes this results in longer wait times before calls are answered. At Christian Super, we have an internal Member Care Team with one of the lowest call wait times in the super industry – most of the phone calls we receive are answered in less than 60 seconds.

 

Are performance and fees the only differences between super funds?

No. While recent performance and current fees are important factors to consider when evaluating a super fund, there are a number of other things to think about such as:

  • Investment risk – Individuals will have a different appetite for investment risk (the chance of losing some of your super savings due to investment losses).
  • Investment approach – While some individuals may be comfortable to invest in any business that produces a ‘good’ return, others may decide that certain investment opportunities should be avoided due to the harm that the underlying business contributes to(e.g. weapons manufacturing, tobacco, abortion services, etc).
  • Insurance coverage – Each super product has a different insurance product attached, with different levels of standard coverage, costs and policy terms.
  • Services offered – While some individuals may be fine with the most basic of services being provided by their superfund, others will be interested in having an internal call centre, a mobile app or some advice services to help them pick the right investment option or insurance within the super fund. Funds that offer these services may charge higher fees than funds that outsource their call centre or offer limited online functionality.

None of the above factors are included in the YourSuper comparison tool. A high-performing fund may be taking more investment risk than an individual may be comfortable with or be invested in companies involved in practices that an individual does not support. Similarly, an otherwise low-cost fund may only offer costly insurance which doesn’t provide a high level of coverage, or that a fund does not offer services that an individual expects to use.

If you are thinking of switching your super based on the information contained in the YourSuper comparison tool, it’s a good idea to check how it could impact the investments you have, the service you receive and level and cost of insurance that you may get compared to your current super fund, before making a decision.