Super Consumers Australia conducted the analysis and as a result is calling for increased safeguards to hold poor performing super funds accountable.
The report, Securing Australia’s Retirement: It’s time to protect retirees from dud investment options, reveals that all the options that failed the government’s annual performance test this year were also offered to retirees.
However, SCA stated that the performance test does not apply to products offered to retirees, meaning people with their retirement savings invested in them are unaware.
“Superannuation is a critical part of Australia’s retirement system and plays a vital role in financially supporting Australians in retirement,” the report stated.
“With the number of retirees with superannuation projected to more than double over the next decade, its importance in providing Australians a secure retirement will only continue to grow. Yet, there are far fewer safeguards in the superannuation system for consumers in retirement than when they’re working.”
SCA analysed new data on super options for retirees, released by Australian Prudential Regulation Authority (APRA) to assess the current performance of multi-sector investment options in the retirement phase products and their financial impact on retirees.
Its main findings included that 99 per cent (135 out of 137) of the platform options that were included in the 2025 performance test are also offered in the retirement phase and 59 per cent (301 out of 511) of the accumulation choice investment options that were included in the performance test in 2025 are also offered in the retirement phase.
“Of the140 accumulation investment options that have failed the performance test since 2023, 128 (91 per cent) were also offered in the retirement phase at the time of failure,” the report stated.
“There is a wide variation of net investment returns across retirement investment options, even after accounting for different risk profiles. Additionally, 29 per cent of retirement options delivered much lower returns than their peers relative to their risk profile.”
The report continued that the wide variation of investment returns has a real impact on retirement income, and a retiree starting with $250,000 in super in the worst performing options could earn approximately $57,000 to $205,000 less in investment returns across a typical retirement when compared to the return it would be expected to earn based on peer returns and its allocation to growth assets.
Dr Katrina Ellis, deputy CEO of SCA, said it is unreasonable that a 64-year-old is protected by a performance test, yet the moment they retire and move into an identical product, that safeguard disappears.
“Retirees deserve the same protections as workers. Without them, people risk losing hundreds of thousands of dollars in retirement income and living standards will suffer,” she said.
“The superannuation system is meant to provide Australians with a dignified retirement, not leave them in the dark about whether their money is working for them. The government must extend the performance test and comparison tool to ensure retirees can avoid the duds and put their money in better performing funds. Anything less is leaving retirees exposed.”
