Acknowledgement of Your Future, Your Super assessment

Posted: 3 September 2021

From Scott Durbin, CEO Commonwealth Bank Group Super:

The trustee board and I acknowledge that our Balanced (MySuper) option did not pass the recent Your Future, Your Super annual performance assessment test conducted by the Australian Prudential Regulation Authority (APRA).

In this test, APRA assessed the net returns of MySuper products over the 7 years to 30 June 2021. A MySuper product’s performance was compared against a benchmark determined by the legislation and calculated by APRA. The MySuper products were assessed as simply having passed or failed the test.

We think we did not pass the test due to the under-performance of some of our investments compared to the benchmark, and the fact that some of our assets are invested differently to the benchmark. Over the 7-year period, the strong performance of the benchmarks used by APRA has exceeded that of our investments.

Later in September we will write to members who have an account invested in the Accumulate Plus Balanced (MySuper) option with more information.

Our investment philosophy is to deliver sustainable returns that meet our investment objectives and minimise volatility (ups and downs) over the long term. An important part of our strategy in delivering smoother returns is our diversification within assets classes and across asset classes.

We expect diversification to produce more consistent returns and to minimise the risk of relying on a smaller range of investments to perform well. Our diversification means we invest less in shares than many other super funds with a similar range of investment options. You can hear our CIO talk about this in our 2021 Annual Member Meeting.

As at 30 June 2021, our Balanced (MySuper) option delivered to its stated objectives and produced a smoother return experience for members than many other MySuper options.1

The Balanced (MySuper) option as at 30 June 2021 delivered, after the deduction of fees and taxes, an annual return of 13% and a long-term return of 7.3% p.a. over the last 10 years. This long-term return has exceeded our objective, which is 2.5% p.a. above inflation (CPI) over a 10-year period. Please note that past performance is not a reliable indicator of future performance.

We have a number of strategic initiatives in progress for our investment portfolios and member benefits. Our planned changes focus on enhancing our MySuper option and helping us maintain our competitive fees.

For further enquiries about our MySuper option, please call us our Accumulate Plus contact centre on 1800 023 928, 8am-7pm Monday to Friday.

1 Source: Based on 5-year return standard deviation of comparable MySuper products as at 31 March 2021; data from SuperRatings Pty Ltd (ABN 95 100 192 283, AFSL 311880).