Your Future Your Super

Allocations to unlisted property, diversified fixed interest, Australian and international shares had the greatest impact on whether an option passed the test or not.

The old ideological battlelines are being drawn up once again in preparation for three more years of fist fighting over Australia’s retirement savings.

A big chunk of super funds are now in “limp mode” as their buffer against the performance test evaporates. And sustainable investing is getting harder when even tobacco exclusions eat up the tracking error budget.

Performance concerns for sustainable investing have risen to the fore as the Your Future Your Super (YFYS) test shortens investment horizons. The wider return outlook is more challenged too.

The performance test for Choice products has been paused, and the Albanese Government has launched a sweeping review into the Your Future, Your Super (YFYS) reforms. So what comes next?

As the new Labor Government explores pathways to 15 per cent, the superannuation industry needs to examine whether that’s really in the best interests of members.

The performance test as it stands isn’t “fit for purpose” when it comes to choice products. And its bright line nature means tweaks are needed for MySuper products too.

A new report from CEM Benchmarking shows that the Your Future Your Super (YFYS) performance test lifts system-wide outcomes. But size of fund is no silver bullet.

The regulator says it doesn’t “blindly adopt” a big is good, small is bad approach, and is concerned the industry is consolidating too quickly.

While Australia’s biggest asset owners are “extremely sophisticated” on ESG, the shackles of the idiosyncratic Your Future Your Super (YFYS) benchmarks are still holding them back on portfolio decarbonisation.