The annual MySuper performance test was introduced under the Your Future, Your Super reforms from 1 July 2021. It requires APRA to assess every MySuper product’s investment performance against a benchmark each year and take action against underperformers.
How the Performance Test Works
APRA compares each MySuper product’s net investment return (after investment fees and costs) over the previous 8 financial years against a composite benchmark return.
The benchmark is constructed by applying market index returns to the product’s actual asset allocation — so a fund with 70% in equities is compared against what 70% in a market equity index would have returned. This removes the excuse that defensive allocations explain underperformance.
The pass/fail threshold
A fund fails if its 8-year net return is more than 0.5 percentage points below the benchmark.
What Happens When a Fund Fails?
| Failure count | Consequence |
|---|---|
| 1st failure | Fund must write to all members within 28 days explaining the failure and directing them to the ATO’s YourSuper comparison tool |
| 2nd consecutive failure | The product is closed to new members until it passes |
Closing to new members is a significant sanction — it prevents the fund from growing through new employee stapling, eventually leading to members seeking alternatives.
Which Funds Have Failed?
APRA has published test results each year since 2021. Several products have failed, including:
- Some retail fund MySuper products
- Smaller industry fund defaults
- Lifecycle options that underperformed their benchmarks due to excessive de-risking
Many failing funds chose to merge with stronger-performing funds rather than face consecutive failures. The number of registered super funds has declined from 150+ in 2020 to under 100 as of 2025 — partly driven by the performance test pressure.
APRA publishes the full results at apra.gov.au.
Limitations of the Performance Test
The performance test is a useful but imperfect tool:
- 8-year window: A fund may have had 2–3 poor years dragging down an otherwise good record — or may have recently improved dramatically but still fail due to older data
- Does not test fees directly: A fund can pass by having high returns even if fees are high; the test measures net returns but doesn’t flag high-fee structures separately
- Does not test choice products directly: The test focuses on MySuper products. Many Australians in choice investment options (non-default) are not covered by the same test, though APRA has extended some assessment to trustee-directed products
- Benchmark construction: The benchmark assumes passive index returns; some funds actively manage (with higher costs) and may underperform a passive benchmark despite skilled management
How to Check If Your Fund Passed
- Go to the ATO’s YourSuper comparison tool
- Search for your fund’s MySuper product
- Products that have failed are marked clearly
- Compare 10-year returns and fees against other MySuper products
Frequently Asked Questions
My fund failed the performance test. Should I switch? A failure is a warning sign and warrants careful review. However, past performance is not a reliable indicator of future performance. Before switching, consider: fees, insurance cover, investment options, and whether the fund has since improved or merged. Speaking with a financial adviser is worthwhile for large balances.
Does the performance test apply to choice super products (not MySuper)? APRA has extended some assessment to trustee-directed products (non-MySuper) but the mandatory notification and closure rules apply most directly to MySuper products. Check APRA’s data for your specific option.
What is the YourSuper comparison tool? A free ATO tool at ato.gov.au/yoursuper that shows all MySuper products ranked by performance, with fee information. See YourSuper Tool Guide.
For more: Best Performing Super Funds, APRA Heatmap, Your Future, Your Super Reforms. For advice on your fund, speak with a licensed financial adviser via MoneySmart.