A recent analysis by Super Consumers Australia highlights a significant gap in protections within the superannuation system, particularly affecting retirees compared to younger individuals.

The report reveals that nearly 30% of retirement products are notably underperforming, yielding returns that are substantially lower than those offered by competitors.

Blake Briggs, CEO of the Financial Services Council, emphasized the importance of retirement products that blend investment strategies with essential features tailored to individual retirement needs. These features include flexible cash access, sustainable income streams, and management of longevity risks.

“Retirement planning is not a one-size-fits-all scenario,” Briggs stated. “A performance test solely focused on investment returns could mislead individuals away from options that might suit their unique situations. Applying such a test to retirement products would be unsuitable.”

Briggs added that while the industry is in favor of greater transparency for retirement products to aid those nearing retirement, the development of a comprehensive data framework by the Treasury is a more suitable approach.

“The industry strongly supports transparency for retirement products to assist those approaching retirement. However, Treasury’s work on a retirement product data framework is a more appropriate step towards this.”

In a hotly contested finding, the Super Consumers Australia report pointed the finger at four institutions.

It claimed that the “majority of retirement options with 10 years’ investment history at AMP, Russell Investments, Colonial First State and Rest underperformed compared to peers across all growth categories”.

“This suggests there may be broader problems with the investment approach at these funds, not simply poor investment choices in a single option,” it added.

However, those findings were strenuously denied by AMP, which described them as “narrow analysis”, “irresponsible claims”, and “misleading”.

“The report fails to recognise that AMP has delivered strong relative returns for our retirement members for the past three years, in addition to our super offers achieving returns in excess of 13 per cent for the past three years to September,” a spokesperson said.

“The report also fails to take into proper account the different objectives of retirement products, or consider contemporary lifetime income retirement solutions, which are delivering significantly better outcomes for retirees.”

Colonial First State also slammed the findings as “not accurate”.

“The report has selectively focused on 12 options out of the total CFS FirstChoice menu which has more than 200 investment options,” a spokesperson said.

“In regard to options in the report, APRA assessed the accumulation equivalent of these same retirement investment options and they passed the annual superannuation performance test,” they added.

Rest also rejected any suggestion its options were underperforming.

“Our Rest pension product is recognised for its value and quality by independent ratings agencies using established methodologies,” a spokesperson said.

A spokesperson for Russell Investments, meanwhile, said the figures cisted for the company’s options “are not accurate”.