The Australian Prudential Regulatory Authorityrecently released its results for the 2025 iteration of the Your Future, Your Superperformance (“YFYS”) test. Since its inception in 2021, the test has aroused considerable debate around its scope, efficacy, and impact on super funds’ investment behavior.

Before we go further, let’s revisit how the test works. Essentially, for any multisector product, performance (adjusted for investment and administrative fees) is compared against a blended benchmark weighted by the product’s strategic asset allocation. If performance (typically measured over 10 years) falls below negative 0.5% per year, the product fails and funds must notify members and take steps to rectify underperformance. Failure for a second straight year closes the product to new members altogether.

The 2025 results could be considered remarkable for how unremarkable they are. With minimal failures overall and a second successive year of zero failures across the two key segments—MySuperand nonplatform trustee directed products—members are understandably asking the question: “Has the test succeeded in its goal of removing uncompetitive products from the market, or have trustees simply figured out how to maximize their odds of passing it?” While this remain an open question, one thing is certain—in August 2025, the Australian government confirmed that the test is now actively under review, although the scope of changes (if any) are yet to be confirmed.

This paper puts the YFYS performance test to the test—we analyze this year’s results, identify trend data, and call out our key observations.

Key takeaways

  • The 2025 YFYS performance test results saw a minuscule number of failures as measured by both number of products and value. Of 556 products, just seven failed. By value, they represented 0.06% of tested products.
  • All failed products were from the tiny platform trustee directed products (“TDP”) segment. The two other, much larger segments—MySuper and nonplatform TDPs—each recorded zero failures for a second successive year.
  • The failure rate among products has trended sharply downward since introduction; in 2021, 1 in 14 members within the YFYS universe were in failed products; in 2025, this lengthened to 1 in almost 2,500.
  • As a cohort, profit-to-member MySuperoptions outperformedtheir for-profit, retail fund peers.
  • Bigger is better—at least most of the time. Larger MySuperoptions tended to record better performance, albeit with a number ofnotable exceptions.
  • Platform TDP results were heavily clustered just above the negative 0.5% per year pass mark. This was partly driven by fee rebates, which, while positive for members, has prompted APRA to engage with relevant trustees about the need for enduring investment performance.
  • The test has faced numerous criticisms and is being actively reviewed by authorities—but it has also encouraged material positive changes in the sector.

The 2025 performance test: A brief summary

The total value of tested products in 2025 reached a record AUD 1.66 trillion. MySuper products remain by far the largest segment by value—73%—despite being the smallest segment by number of products—just 52 out of 563. The 2025 results were remarkably unremarkable. There were no failures across the two largest segments by value—MySuper and nonplatform TDPs—for a second straight year and just seven failures out of 137 platform TDP products (compared with 37 out of 192 in 2024) . Of the failed products, four were from AMP, two were from Bendigo, and one was from Insignia. All had small member bases; six of the seven had fewer than 1,000 members.

Super performance

Performance over time: Falling failure rates

Whether it’s by dollar value or number of products, the data is clear: There has been a remarkable decline in failure rates. In 2021, products worth a combined $56 billion failed the test. This year, the figure was $1 billion; while a large number at first glance, it represents just 0.06% of the entire testable universe by value. In 2021, around 1 million members were in failed products; in 2025, just 8,500. In 2021, 1 in 14 members were in failed products; this year, it was 1 in nearly 2,500. Regardless of how you look at it, it’s the same story—failing the test is getting less and less common.

Performance failure

Profit-to-member funds shine through

MySuper products are the largest tested cohort by value, representing $1.2 trillion in value and 16 million members.

While every MySuper option passed the test—most of them comfortably so—ranking the data by performance quartiles reveals some clear trends.

First, when it comes to performance, profit-to-member funds dominated their for-profit, retail fund peers. The absence of a profit motive begets lower overall fees, which certainly helps.

Interestingly, the only for-profit MySuper option in the first quartile—Mercer Super’s Lutheran Superannuation product—is worth a tiny $391 million and caters for just 3,650 members; on both counts, it is among the smallest MySuper options in the market.

While being a member of a profit-to-member fund elevates the odds that your product performed well in the test, it’s by no means a guarantee. For example, REST’s MySuper product—worth a remarkable $80 billion and with nearly 2 million members— ranked 44th out of 50 products.

Non profit

Size matters

When it comes to performance by MySuper option size, there’s a clear trend—this time, size matters. By average size, MySuper options in the first quartile were quadruple those in the bottom quartile.

Of course, the nexus between option value and performance is not ironclad—some small options have performed very well, and vice versa. Perhaps the most noteworthy result in this year’s performance test was that the first-placed MySuper product came from MIESF, a tiny, $1 billion fund for 16,600 meat industry workers that blitzed the opposition by returning 1.9% per year—2.4% per year above the pass mark. Second place on the podium also went to a small fund—the $5 billion First Super.

These results were despite both funds’ MySuper options charging relatively high administration fees—a common trait among smaller funds unable to scale their operational infrastructure relative to their asset and member bases.

Ultimately, strong performance was not enough for MIESF—the fund’s small, limited member base contributed to its decision to merge into the much larger CareSuper on Oct. 1, 2025.

Super size

The curious case of platform TDPs

We’ve already noted that platform TDPs were the only market segment in which there were performance test failures in 2025—and even then, only a small minority of products failed. As a segment, their performance under the test has been much weaker than MySuper and nonplatform TDPs, with a median performance test return of negative 0.26% per year (compared with positive 0.19% and 0.29% per year, respectively). Indeed, regulator APRA has noted that over 40% of platform TDPs with a 10-year performance history exhibit “significant underperformance.”

Not only has performance for platform TDPs been poor, but taking a closer look at the results also reveals an unusual trait—a heavy concentration of products just above the pass mark of negative 0.5% per year. Of the 75 products with test results disclosed, 25, or one-third, scored between negative 0.4% and negative 0.5% per year. What’s more, 12 of these returned negative 0.49%—just 0.01% inside pass territory!

How did this anomaly occur? APRA has pointed to fee rebates as a key factor. That is, for some products, trustees provided enough of a rebate to lift the products out of “fail” territory. While fee reductions are no doubt welcome for members (certainly more so than fee increases!), APRA has since put trustees on notice—the regulator will engage with relevant platforms about the need for a persistent improvement in investment performance, even if a product has technically passed the test.

Distribution TPD

Where to from here?

Since its introduction, the YFYS performance test has had its fair share of critics. As a relatively simple tool by design, it is understandable that more complex, nuanced approaches have been proposed. The ultralow failure rates in 2024 and 2025—a trend that seems likely to continue—is only going to further embolden advocates for change.

That said, it’s hard to deny that the test has filtered out subpar funds from the sector—13 of the 14 MySuper options that failed in the first year have since closed, as have most of their parent super funds. Just one fund, CFS, has recovered, taking material steps to improve its investment offering—a clear positive for members. The threat of test failure has also helped nudge a raft of merger activity as funds seek to generate scale and cut costs. There were 158 APRA-regulated funds in June 2021; today, there are just 89. Meanwhile, fees have continued to trend downward.

Nonetheless, the test has also faced valid criticisms over time:

  • Fear of failure has been said to encourage funds to “hug” YFYS benchmarks. That said, this is not the full picture; in our observations, benchmark-hugging may also be due to the growing capacity constraints that mega-funds can face for active strategies in certain asset classes—above all, Australian listed equities. Additionally, many major funds are now performing so far above the test’s pass mark that they are less concerned about failure.
  • Its simplicity leaves it susceptible for “gaming” by funds, who may allocate assets in a way that offers a high probability of passing the test.
  • A limited menu of relatively broad-based indexes as benchmarks can discourage allocations outside these benchmarks, even if otherwise attractive from a portfolio construction perspective.
  • The test does not account for a fund’s strategic asset allocation nor risk taken.
  • While the test has encouraged funds to trim fees, member experience and operational infrastructure are at risk of deteriorating as a result.

These concerns have not gone entirely unheeded. In August 2025, the Australian government announced that it would be reviewing the performance test. Given recent political signaling, changes may dovetail with the government’s push to improve economic productivity and focus on encouraging investment in higher-risk asset classes, such as venture capital. The Australian Securities and Investments Commission has also announced a review into the regulatory fee treatment of stamp duty for residential property, which is relevant to the performance test’s calculation and has been cited as a disincentive for superannuation fund investment in the sector. Ultimately, regardless of the performance test’s evolution going forward, it is imperative that its focus remains aligned with trustees’ duty to act in their members’ best financial interests.

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