Actuaries Institute calls for superannuation test revamp

The proposed two-metric test would introduce a new measure based on risk-adjusted performance.

The Actuaries Institute is urging for a revamp of the annual Superannuation Performance Test, proposing a transition to a two-metric format to better serve the financial interests of members. 

In its submission to the Treasury’s consultation on potential reforms, the Institute highlights concerns that the current test may impede long-term returns. 

Tim Jenkins, Chair of the Institute’s Superannuation and Investments Practice Committee, emphasises the need for improved retirement outcomes. 

The proposed two-metric test would retain the existing performance metric while introducing a new measure based on risk-adjusted performance.

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This change aims to encourage trustees to make decisions aligned with members' interests. Additionally, the Institute recommends adjusting the fee assessment criteria to reflect higher typical member balances. 

It calls for a greater role for trustees and APRA in addressing underperformance in choice options and suggests facilitating consolidation to remove barriers. 

However, the Institute opposes expanding the test to include additional investment options such as retirement products and self-managed super funds.