Retirement is not a single journey — it’s millions of different ones. Each retiree’s path is shaped by their health, housing, family, lifestyle, and financial needs. What’s clear is that retirees need more from their super than they did during the accumulation phase. In retirement, super must shift from being a savings vehicle to a reliable source of income, stability, and confidence. This means we need to both measure the quality of retirement phase products, and we need better tools to assess their quality.

APRA’s latest data on retirement phase superannuation products — published in its March 2025 Quarterly Superannuation Product Statistics — looks at one important component of building a more robust quality filter for the retirement phase – the investment performance of retirement phase products. Analysis by SMC shows returns vary quite significantly across the industry.

While investment performance is not the only measure of quality, it is a critical one. Retirees deserve to know whether their fund is delivering strong long-term returns — especially when those returns directly affect how long their savings will last and the standard of living they can maintain. SMC’s submission to Treasury in February 2024 outlined this view: performance matters, but it must be assessed alongside other indicators of product quality. A comprehensive quality filter will also need to consider fees, risk, product design and flexibility, and member service outcomes.

An analysis of the APRA data by SMC’s data team (see Chart 1) reveals a clear and consistent pattern. Retirement products offered by retail super funds significantly underperform relative to profit-to-member (PtM) funds across all volatility quintiles. In other words, regardless of the level of investment risk a retiree decides to take, PtM funds deliver consistently better long-term returns for retirees.

Chart 1 – Net return annualised across 5 volatility quintiles, March 2025

Note: Single sector options are excluded. Annualised net return (rep member with $250,000) of various durations weighted by investment option member assets of the latest quarter available. Only options with available returns are included in this analysis. Investment options (including life-cycle options) not aggregated to product level. Source: APRA Quarterly Product Level Superannuation Statistics (March 2025) – Table 7c.

Transparency matters, When retirees are targeted to switch to retail funds at retirement, the evidence — previously unavailable — shows many would be better off staying the course with their PtM fund if returns are a high priority. The data also shows PtM funds tend to offer lower fees and manage larger member pools — further reinforcing their efficiency and value and the need to shine a light on performance.

Retirement phase products should be subject to the same scrutiny as accumulation products. A quality filter — one that includes performance but also reflects the broader needs of retirees — will help ensure all retirees can make more informed choices.

This editorial was originally published in SMC’s weekly Super Wrap – subscribe here.