Unions and super funds say planned superannuation reforms could put Australia's economic recovery at risk.

The Federal Government is reportedly working on a new set of superannuation industry rules, including penalties for funds that repeatedly report poor investment returns.

The proposed framework would classify any funds as ‘underperformers’ if their annual net investment return falls by more than 0.5 percentage points over an eight-year rolling period.

There is concern that the changes will impact on the funds' ability to help the economy out of its COVID-19 recession.

The Australian Council of Trade Unions (ACTU), Australian Super and construction super fund Cbus all say that the new regime encourages shorter-term investments and offshore projects, rather than investing in nation-building infrastructure with decades-long timeframes.

The changes are expected to be introduced by the government in July.