About 8500 people, mostly public servants, are members of ART’s socially responsible option which operates under the QSuper banner and invests with a set of environmental, social and governance principles. Those members suffered a 0.41 return for the last financial year compared with some returns by ART and other funds that generated a return of about 10 per cent.

The Australian Prudential Regulation Authority conducts an annual test on super funds which is designed to improve outcomes by assessing the long-term performance of funds against benchmarks.

All of ART’s other investment options passed the APRA test.

The My Super sector, which is the default option for people who don’t choose a fund when they start a new job, was tested for the third year and APRA said only one didn’t meet the benchmarks compared with five the previous year. The ART fund was what is called a trustee-directed product and 95 other similar investment options in this area failed to meet the APRA benchmarks.

ART, headed by Bern Reilly, said it was disappointed that the fund had failed the performance test by APRA and pointed out that the fund had a nine-year performance outcome of 4.5 per cent.

“We take investing in our members’ retirement seriously,” a spokesperson said.

ART said it was intending to close the socially responsible option from July next year and members would be able to choose other investment options including a socially conscious balanced option.

“In the meantime, we have already made a range of changes to this option’s investment strategy and asset allocation which we believe will improve its performance,” ART said.

APRA said trustees of products that failed to pass the benchmarks must notify their members of the test outcomes by September 28. Trustees cannot accept new members into products that have failed for two consecutive years.

The ART socially responsible option failure was its first.

APRA deputy chair Margaret Cole said the expanded scope of this year’s test had significantly enhanced transparency over a wider range of super investment options.

“The annual performance test remains a powerful tool to help APRA hold trustees to account for product performance, fees and costs. Since its introduction in 2021, nine underperforming MySuper products have exited the market and a total of 800,000 members, with combined assets of $39 billion, have moved to better performing products.”

Cole noted that evaluating choice product performance was more nuanced than for default MySuper products.

“Members in trustee-directed products make active decisions about their investment options and some might select products for reasons beyond performance. Nevertheless, all trustees must take responsibility for the products they make available and ensure the products they offer are in their members’ best financial interests.”

“We acknowledge that some trustees with multiple failed products have rationalisation programs underway to improve member outcomes. APRA expects heightened focus on these underperforming products and will be monitoring the progress of product consolidation programs closely,” she said.