APRA Annual Performance Test

The Australian Prudential Regulation Authority (APRA) is an independent statutory authority that supervises banking, insurance and superannuation institutions.

To learn more about APRA, visit apra.gov.au.

The APT assesses investment options according to benchmarks that are set by the superannuation regulations. They include elements of investment performance, administration fees and median performance across the industry relating to superannuation products only. The APT does not apply to non-super investments such as Investor Directed Portfolio Services (IDPSs).

It applies to superannuation products in the ‘accumulation’ phase, and does not apply to most superannuation products which are paying a pension.

When reviewing the APT results, you should also be aware that any changes you make to your investments could result in additional taxes and transaction costs.

Further, it’s important to note that the past performance of an investment is not necessarily a reliable indicator of future performance.

The investment options you were recommended by your financial adviser were customised for you based on the information you provided at the time. This is why we believe it’s important to review the results and speak with your financial adviser to see what action, if any, is appropriate for you.

If you don’t have a financial adviser, you can find one here.

Superannuation regulations require the Trustee to close investment options to new members when they do not pass the APT requirements for two consecutive years. Existing investors can continue to hold, invest and switch from their investment option.  

Currently, the test only applies to certain superannuation options and not to non-super investments such as IDPSs.

If you hold a guarantee as part of your super plan, it’s important to consider it when considering the APT results.

The guarantee offers protection over the initial capital value of the option that members invested at the start of the term. This ensures that they cannot be any worse off at the end of a term than the initial money that they invested into that option due to any negative investment performance.

The APT primarily focuses on investment performance, without considering the role that the guarantee plays in managing risk and protecting your retirement savings from the impact of any downside returns.

If you have a guarantee, it’s important that you don’t make any changes to your investment option without first understanding how your guarantee may be affected. In some cases, making changes to your investment could result in terminating the guarantee, which could result in a loss for you.

We’re committed to offering a wide range of investment options which meet client needs and are market competitive, and we’ll continue to review and enhance the investment options we offer.