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2023 Gov Bench Marks, Mergers and New Rules

James Lewis • Jul 25, 2023

2023 Gov Bench Marks, Mergers and New Rules

Navigating the world of superannuation can be complex, with various rules and benchmarks to consider when choosing the right fund for your retirement savings.

One of the key aspects to understand is the performance test that My Super funds and trustee-directed products are subjected to.

This test is designed to ensure that these funds are delivering value to their members and meeting certain performance standards.

But what happens if a fund doesn't meet these benchmarks?

In this blog post, we delve into the consequences of underperformance and the rules around accepting new members.

We also provide an overview of the current superannuation benchmarks and rules to help you make an informed decision about your superannuation.

Sure. Here are the rules for accepting new members if you don't hit the benchmarks:

My Super funds:

If a My Super fund fails the performance test two years in a row, it can no longer accept new members.

This is to protect members from joining a fund that is not performing well.

Trustee-directed products:

From 1 July 2023, trustee-directed products that fail the performance test two years in a row will be prohibited from accepting new members.

This is to ensure that all superannuation products are held to the same high standards.

It is important to note that these rules only apply to My Super funds and trustee-directed products. Other types of superannuation funds, such as industry funds and retail funds, are not subject to these rules.

Here are some additional things to keep in mind:

The performance test is based on a five-year period. This means that a fund could fail the test in one year, but still be considered a good performer overall.

The performance test is only one factor to consider when choosing a superannuation fund. Other factors, such as fees and investment options, are also important.

If you are not sure which superannuation fund is right for you, you can use the ATO's Your Super comparison tool. This tool allows you to compare different funds based on their fees, returns, and investment options.

The current superannuation benchmarks and rules are as follows:

Benchmarks:

* **Balanced option:**

* Target return: Consumer Price Index (CPI) plus 3% a year over ten years, CPI plus 4% over 20 years.

* Likelihood of a negative return: 3–4 years in every 20-year period.

* Asset mix: Growth 76%, defensive 24%.

* **High growth option:**

* Target return: CPI plus 5% a year over ten years, CPI plus 6% over 20 years.

* Likelihood of a negative return: 5–6 years in every 20-year period.

* Asset mix: Growth 90%, defensive 10%.

* **Conservative option:**

* Target return: CPI plus 1% a year over ten years, CPI plus 2% over 20 years.

* Likelihood of a negative return: 1–2 years in every 20-year period.

* Asset mix: Growth 50%, defensive 50%.

Rules:

* **Superannuation guarantee:**

* Employers must contribute 10% of an employee's salary to superannuation.

* This is increasing to 12% by 2025.

* **Self-managed superannuation funds (SMSFs):**

* Individuals can set up their own SMSFs to manage their superannuation.

* SMSFs can be more complex and risky than other types of superannuation funds.

It is important to note that these are just general benchmarks and rules. The actual performance of your superannuation fund will depend on a number of factors, including the asset mix of the fund, the fees charged, and the overall performance of the market.

If you don't want to settle for mediocre returns, compare your super fund today and move to an actively managed, previous 5 & 10 year higher performing portfolio!

A Source - https://www.superguide.com.au/comparing-super-funds/how-review-super-fund

Compare Your Super Fund!

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The information on this website is General Information only and therefore does NOT take into consideration your personal financial situation, objectives and needs. Prior to acting on any information on this website you should consider what is appropriate for your own personal financial situation, objectives and needs. Aus Super Solutions is not associated or affiliated with any super funds, we aren’t a financial advisory firm, we do not sell financial products nor do we give financial advice. Our role is to connect clients with fully licensed financial advisors that operate compliantly under an Australian Financial Services Licence. Aus Super Solutions does not take in any way responsibility for any advice or recommendations provided by the financial advisors. Prior to acting on any advice provided by the financial advisor you should and can ask as many questions as you deem necessary to ensure you have received the right advice for your personal financial situation. All fees and costs must be clearly explained and after speaking with a referred advisor you are under no obligation to commit to any recommendations made nor cost payable to Aus Super Solutions should you decide against the advice provided. Before making any decisions regarding your super you should obtain the super fund’s Product Disclosure Statement (PDS) and consider its contents. However our goal and mission is to only recommend and connect clients with fully licensed financial advisors and firms with established, positive track records in enhancing and servicing their clients financial situation, objectives and needs.