‘Just six funds pass’: New superannuation test most funds are failing

Only six superannuation funds have passed a new test on how well they meet consumers’ needs in retirement.

The retirement-readiness test by Chant West and Epic Retirement Institute focuses on 18 criteria based on strong retirement income products, fair fees, good support for those transitioning into retirement and tailored investment options.

To get a tick, the fund needed to score well in 12 of the 18 criteria.

Leading the pack was Hostplus, which met 14 criteria, followed by Aware Super and Brighter Super, which each scored 13 out of 18.

UniSuper, Telstra Super and Australian Retirement Trust also passed, with each scoring 12 out of 18.

About 65 funds were tested, including 15 of the major players.

Chant West general manager Ian Fryer told NewsWire the system would help Australians understand how their superannuation was performing against others in the market.

“Part of the idea is to highlight the funds doing well, but also make it clear to funds that aren’t doing well so they can help their members in retirement,” he said.

Mr Fryer said the current system, due to sheer numbers and age of the system so far, had been focusing on the accumulation side and less so on helping members post retirement.

“The industry has focused on taking the money in, investing it well and getting strong returns, which overall it has done well in that space,” Mr Fryer said.

“But what we’ve seen over the last five to 10 years, there’s a lot more people retiring. Since there are so many more people in that space, funds need to put more focus on these individuals.”

While only six funds have currently earned a tick, Mr Fryer forecasts multiple funds will be added in the coming years, while pointing out where they are currently going wrong.

“The main area where superannuation funds fell down was in the services area,” he said.

“There is a number of criteria we have, including how long it takes to get a pension account set up, which should be under three days.”

“Also making changes to a pension or putting money into a pension — these needs to be three days or less as well.”

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Mr Fryer further highlighted the importance of funds being able to give pensioners payments for urgent reasons or looking into advice for members who are about to enter retirement.

“The other parts of service are things like helping members understand what retirement is all about, what the options are in retirement, how to get the most out of retirement in terms of products,” he said.

Epic Retirement educator Bec Wilson, who co-founded the idea said it shouldn’t be a mystery whether a super fund is built for retirement or not.

“We’ve made it simple – with the Epic Retirement Tick. It’s the first retirement-ready benchmark designed for real people, to help you evaluate your super fund and understand its priorities more clearly,” she said.

Ms Wilson said the report would give members a clear picture as to how their funds stacked up and send a message to others about what should matter for retirees.

“Your retirement is too important to leave in the hands of a fund that isn’t prepared to deliver excellent retirement services when you need them most,” she said.