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APRA sheds light on YFYS Performance Test

The prudential regulator has clarified Canberra's Your Future, Your Super performance test by adding new answers to its website.

The test applies from July 2021, to My Super products and from July 2022 to trustee-directed products.

APRA said it will not use data submitted after August 15 for the performance test.

"For the relevant assessment year, APRA will not include any updates data received after August 15 other than in exceptional circumstances."

APRA went on to confirm beneficiaries cant hold a product that fails the performance test for a second consecutive year, until a future test is passed.

"RSE licensees are expected to have administrative processes in place to ensure they comply with their legislative obligation to prevent new beneficiaries from holding the product on and from the day the second fail notification is received."

"Any contributions received from or on behalf of persons who were not holding the product before that day will need to be returned."

"APRA expects RSE licensees of MySuper products that failed last year's performance test to be engaging closely with their employer-sponsors, promotors, and other key stakeholders to ensure they are aware that the product may be closed to new beneficiaries if the product fails this year's performance test."

APRA added it will send RSE licensee results of the performance in a written notification prior to publication.

"Publication of the outcomes of the performance test for all products that have been assessed will occur end of August each year."

Lastly, APRA said it will combine or stitch performance test history where it granted a new My Super product authorisation based on material goodwill.

"Where APRA grants a new MySuper product authorisation under the material goodwill provision, APRA is satisfied that the previously authorised MySuper product is similar to the new MySuper product under s 29TA of the SIS Act. Accordingly, APRA will in such circumstances combine the performance history of both products for the purpose of the performance test. For further information, refer to APRA's Information Paper on combining performance histories for the purposes of the performance test."

The assessment under the performance test, in conjunction with the ATO's Your Super comparison tool, is intended to hold RSE licensees to account for underperformance.

Read more: APRA