The Fine Print Australia · PUBLISHED 23 JUN 2026 · VERIFIED 23 JUN 2026 · AU EDITION

800,000 Aussies in Failed Super Funds: APRA Performance Test

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An estimated 800,000 super accounts have already been forced out of dud products that failed APRA’s performance test and into better-performing funds, after 14 MySuper products failed since 2021.

The number that matters

14 MySuper products (covering ~800,000 accounts) have failed APRA’s annual performance test since 2021, and 13 of those products have exited or announced plans to exit the market. This is based on Treasury’s 2024 consultation paper on the Annual Superannuation Performance Test, summarising APRA data up to 2023–24.

How it quietly costs you

Mechanism: How APRA’s performance test works and how underperformance costs you

• The Your Future, Your Super (YFYS) performance test is run annually by APRA on MySuper and trustee‑directed products (TDPs).
• For each product, APRA compares:
• its historical net investment performance against a benchmark return based on the product’s strategic asset allocation (SAA), and
• its latest administration fees against the median fee for similar products.
• For MySuper, the test usually looks at 8 years of returns; for TDPs, it uses the maximum available history up to 10 years.
• If a product’s net performance falls more than 0.5 percentage points per year below its benchmark (e.g. –0.6% p.a. relative performance), it fails the test.

Immediate consequences of a fail

• Products that fail must write to affected members within 30 days, telling them the product failed and what it plans to do to improve outcomes.
• Funds must also direct members to check the ATO’s YourSuper comparison tool, which shows fees and long‑term performance versus other funds.
• If a product fails two years in a row, it must be closed to new members until it passes a future test and typically faces pressure to merge or transfer members.

Quantified impact: What “–0.5% per year” really costs

APRA’s line in the sand is –0.5% per year under the benchmark. That sounds small, but compounded over decades it is large:

• Assume two workers each start with AUD 50,000 in super at age 30, add AUD 7,500 per year (roughly 10% SG on a AUD 75,000 income), and invest for 30 years.
• Worker A is in a product that matches the benchmark at 7.0% p.a.; Worker B is in a product that underperforms by 0.5% p.a. (6.5% p.a.).
• Using standard compound‑interest modelling, a 0.5% p.a. gap over 30 years typically reduces the end balance by roughly 10–12%, which on a benchmark outcome of, say, ~AUD 750,000 equates to an underperformance of about AUD 75,000–90,000 in retirement savings for Worker B.
• This is illustrative modelling based on the APRA test threshold (–0.5% p.a.), not an official projection, but it shows how just scraping under APRA’s fail line can still cost tens of thousands of dollars over a career.

Old vs better comparison: MySuper vs underperforming TDPs

• Since the test began, 14 MySuper products have failed; 13 have exited or announced exit, and the remaining one improved performance. This has led to about 800,000 accounts being moved to better funds.
• When APRA extended the test to TDPs (often used on platforms), it found 12% of all TDPs were underperforming based on 2023 results, and the failure rate for platform TDPs was 25%, versus 4% for non‑platform TDPs.
• By the 2025 results:
• All 52 MySuper products passed, and
• All 374 non‑platform TDPs passed,
• but 7 of 137 platform TDPs failed (down from 37 platform fails the year before).

So the “old” world is platform‑based choice products, where underperformance is common; the “better” world is MySuper and non‑platform TDPs, where current failure rates are effectively 0% in APRA’s test.

The second, compounding trap

Mechanism: Trustee‑directed platform products that never trigger obvious alarms

The second layer of risk is that many Australians are in trustee‑directed products on platforms (often via advisers or wrap accounts) that:

• technically “pass” APRA’s test but cluster just above the fail line, or
• show long‑term underperformance relative to better‑value funds even if they clear the test once.

Key facts:

• In 2025, APRA assessed 563 super products:
• 52 MySuper,
• 374 non‑platform TDPs,
• 137 platform TDPs.
• Seven platform TDPs failed the 2025 performance test.
• APRA notes that over 40% of platform TDPs with a 10‑year history show “significant investment underperformance”, even if they did not necessarily fail the test that year.
• Morningstar’s analysis of the 2025 results shows that platform TDPs had a median performance test return of –0.26% per year, versus +0.19% p.a. for MySuper and +0.29% p.a. for non‑platform TDPs.

That means the typical platform TDP is about 0.45–0.55% per year worse than better‑performing segments, close to the APRA fail trigger.

Long‑run cost: being “just above the line”

Using Morningstar’s segment‑level gaps:

• Assume a member in a platform TDP earns 0.45% p.a. less than a similar MySuper product over 30 years (–0.26% vs +0.19).
• On a projected benchmark balance of AUD 750,000, a 0.45% p.a. drag could reduce the end balance by roughly 8–10%, i.e. about AUD 60,000–75,000 over 30 years (illustrative compound‑interest modelling).
• If the platform TDP sits closer to APRA’s fail line at –0.4% to –0.5% below benchmark (a range that includes one‑third of all platform TDPs Morningstar examined), the gap vs a strong non‑platform product could easily approach 1% p.a..

At a 1% p.a. performance gap over 30 years, a worker targeting AUD 750,000 could lose roughly 15–20% of their final balance—about AUD 110,000–150,000—purely from persistently being in a “meh” platform option rather than a better MySuper/non‑platform TDP.

Compounding factor: repeat failures and heightened scrutiny

• When APRA extended the test to TDPs in 2023, 12% of TDPs failed, but 25% of platform TDPs failed that year, compared with 4% of non‑platform TDPs.
• Funds with failed products face heightened APRA supervision and must be closed to new members if they fail two years in a row.
• Despite these pressures, legal and industry commentary notes that many underperforming platform products remain open and sit just above the fail line, keeping members in chronically mediocre options that drain long‑term returns.

What this looks like in practice

Persona:

• Name: Sarah
• Age: 37
• Job: Human resources manager at a mid‑sized firm
• Income: AUD 95,000 per year (before SG)
• Super: AUD 120,000 total balance
• Fund type: Default MySuper through her employer, plus a choice/platform TDP she was put into by a previous adviser (AUD 40,000 of the total).
• Years to retirement: 30 years (aiming to retire at 67).

Discovery 1 — Her “old” MySuper fund once failed, but was merged

• Sarah finds out from Treasury’s consultation paper that 14 MySuper products have failed the APRA test since 2021, and 13 exited or announced plans to exit, moving 800,000 accounts to better‑performing funds.
• She realises her current MySuper product is from a fund that absorbed one of these failed products after a merger.
• Compared with staying in the failed product at –0.5% p.a. underperformance, being merged into a benchmark‑level fund could preserve around 10–12% more in end balance over 30 years—as much as AUD 75,000–90,000 on a AUD 750,000 retirement target (illustrative modelling based on Treasury’s 0.5% fail threshold).

Discovery 2 — Her platform TDP is part of a chronic underperformer segment

• Using APRA’s product list and Morningstar’s analysis, Sarah discovers her platform TDP sits in the segment where the median performance test return is –0.26% p.a., versus +0.19%–0.29% p.a. for MySuper and non‑platform TDPs.
• That means she is likely giving up around 0.45–0.55% p.a. compared with strong non‑platform products.
• On her AUD 40,000 platform balance, a 0.5% p.a. underperformance over 30 years could leave her with roughly AUD 5,000–7,000 less than if that slice were invested in a top‑quartile fund (illustrative compound modelling).

Discovery 3 — Many platform products quietly underperform for a decade

• APRA warns that over 40% of platform trustee‑directed products with a 10‑year history show “significant investment underperformance”.
• If Sarah’s entire AUD 120,000 balance stayed in such a platform option, and it delivered 1% p.a. less than a high‑performing MySuper option over her remaining 30 years, her final balance could be 15–20% lower.
• On a benchmark trajectory of around AUD 750,000, a 15–20% shortfall is roughly AUD 110,000–150,000 less for retirement—far more than any short‑term market dip, and entirely due to product choice rather than volatility (illustrative modelling based on a 1% p.a. differential).

The full cost of doing nothing

For Sarah, combining Problem 1 (risk of –0.5% p.a. underperformance or being stuck in a failed product) and Problem 2 (chronic platform TDP underperformance):

• Assume she keeps:
• AUD 80,000 in a MySuper product that performs at benchmark;
• AUD 40,000 in a platform TDP that delivers 1% p.a. less than a good MySuper/non‑platform option, and she keeps that gap for 30 years.
• Using standard compound growth logic and scaling from Treasury/APRA thresholds and Morningstar’s segment gaps, that 1% p.a. drag on one‑third of her balance can easily cost her around AUD 40,000–50,000 on that platform slice alone over 30 years.
• If, instead of a 1% gap on a slice, we model Sarah as if her whole balance were trapped in a product failing or barely passing APRA’s threshold (–0.5% to –1.0% p.a. vs strong funds) over 30 years, the total lifetime cost could reach AUD 110,000–150,000, consistent with the 15–20% underperformance estimate for a AUD 750,000 target balance.

Headline combined impact (for video framing): A typical mid‑career worker like Sarah risks around AUD 100,000+ in lost retirement savings over a 30‑year horizon by staying in a failing or near‑failing platform product instead of switching to a strong‑performing MySuper/non‑platform fund, based on APRA’s own failure threshold (–0.5% p.a.), Treasury’s MySuper failure statistics, and Morningstar’s performance gaps between platform and non‑platform products.

(These are modelling estimates grounded in the official 0.5% p.a. failure rule and published segment‑level performance differences; they are not personalised projections.)

What to do about it

1. Check if your fund or product has ever failed APRA’s performance test

1. Action: Search APRA’s performance test results and product list by fund name.

2. Tool/portal & where to find it:

• APRA — “Superannuation performance test results and product heatmaps” pages (e.g. “APRA releases 2025 superannuation performance test results and product heatmaps”). These include lists of products and identify which ones failed in each year.

3. Three concrete steps:

• Step 1: Go to APRA’s website and open the latest “superannuation performance test results” media release or data tables (look for the current year, e.g. 2025).
• Step 2: Download the product list and search (Ctrl+F) for your fund name and product name (e.g. “MySuper”, “Balanced”, or your platform option).
• Step 3: Check the “result” column for each year; if it shows “Fail” for your product, note whether it’s a first‑time or consecutive fail.

4. What “good” looks like:

• Your current MySuper or TDP product should show “Pass” every year it appears.
• If it has ever failed, especially twice, that is a strong signal to consider switching, as funds with two consecutive fails must stop taking new members and face APRA pressure to merge or improve.

2. Compare your fund’s returns and fees against the best performers

1. Action: Use the ATO’s YourSuper comparison tool to benchmark your MySuper option.

2. Tool/portal & where to find it:

• ATO — YourSuper comparison tool: an official government website that lists MySuper products, their annual performance (typically 7–8 years) and fees.

3. Three concrete steps:

• Step 1: Log in to myGov, link your ATO account, and open the YourSuper comparison tool via the ATO menu.
• Step 2: Type your fund’s name or ABN to locate your MySuper product, then view its net returns over the last 7–8 years and its annual fees.
• Step 3: Sort or filter by “performance” and “fees” to see how your product ranks versus other MySuper products; note if it sits in the bottom quartile for performance or has fees higher than the median.

4. What “good” looks like:

• A MySuper product with above‑median net returns over 7–8 years and fees at or below the median.
• Treasury notes that most MySuper products that failed the test ultimately closed or exited, and current test results show all 52 MySuper products passed in 2025. Being in a top‑quartile performer is ideal.

3. Find and fix any underperforming platform / choice products

1. Action: Identify any trustee‑directed or platform options you hold and compare them to non‑platform options.

2. Tool/portal & where to find it:

• APRA’s TDP performance test tables for the latest year, particularly the “trustee‑directed products – platform” section.

3. Three concrete steps:

• Step 1: Get your latest super statement and list the exact names of any choice, wrap or platform options (they may be labelled “trustee‑directed products”).
• Step 2: On APRA’s site, open the annual performance test results – trustee‑directed products and search for each option name to see if it appears and whether it passed, failed, or narrowly passed.
• Step 3: If you hold a product that has failed, is run by a trustee with multiple failed products, or sits in the platform TDP segment APRA says is significantly underperforming, contact your fund (or adviser) and request a switch into a MySuper or strong non‑platform TDP with better long‑term performance and lower fees.

4. What “good” looks like:

• Being invested mostly in MySuper or non‑platform TDP options, which currently have 0% failure rates in APRA’s latest test results.
• Avoiding platform TDPs from trustees that appear frequently among APRA’s

Sources

• https://treasury.gov.au/sites/default/files/2024-03/c2024-471223-cp.pdf
• https://www.apra.gov.au/news-and-publications/apra-releases-2025-superannuation-performance-test-results-and-product
• https://www.apra.gov.au/2025-annual-superannuation-performance-test-trustee-directed-products

Researched 2026-06-23.

Corrections & disclosure: an AI-assisted, human-reviewed guide. Every figure is dated and sourced above. Spot something out of date or wrong? Tell us and we’ll correct it — corrections are noted here and in the video description.