APRA figures show annualised returns averaged just 2 per cent over the past five years.
NON-PROFIT and in-house corporate funds have topped an official list of Australia's best-performing super funds, well ahead of retail funds run by the big banks and wealth managers.
Figures from the Australian Prudential Regulation Authority yesterday tracking the hundreds of billions of dollars held in managed super funds, show annualised returns averaged just 2 per cent over the past five years.
But the performance improved when measured over the longer term, with returns averaging 5 per cent over eight years.
The APRA figures show that $346 billion worth of the country's superannuation savings are tied up in funds that have delivered below-average returns over the past five years.
Of the 50 funds to post the best returns between 2007 and 2011, 42 were not-for-profit or in-house corporate funds.
The best returns were led by stevedoring-linked fund CBH Superannuation, which posted five-year returns of 7.1 per cent. The Goldman Sachs JBWere staff fund, a consistent top performer, posted annual returns of 5.2 per cent.
Commonwealth Bank's staff fund came in third, returning 4.7 per cent over five years. The Reserve Bank's staff fund came in at fifth place, with 4.4 per cent.
The best-performing industry scheme was the Catholic Superannuation fund, with average returns of 4.1 per cent over five years.
Challenger Retirement Fund was the only retail fund to make the top 50, with an average rate of return of 4.5 per cent over the five years to 2011.
Among the poor performers, Motor Trades Superannuation Fund averaged a loss of 0.8 per cent over five years while the 4200-member LifeFocus retail superannuation fund posted minus 6.3 per cent over the same period.
The figures come as the Productivity Commission conducts a review of how default super funds are chosen for workers on award wages. At present, employers and unions decide on a default fund for staff, but retail funds have protested that the process is uncompetitive and lacks transparency.
The chief executive of Industry Super Network, David Whiteley, said yesterday the better performance of not-for-profit funds had ''obvious and profound'' implications for the debate over default funds.
''At the end of the day, maximising how much super the employee has when they retire is the principal objective of our compulsory system, and the system needs to ensure that employees who do not choose their own super fund are members of a
well-performing fund,'' Mr Whiteley said.
Frequently Asked Questions about this Article…
Which super funds topped APRA’s list of best-performing super funds?
APRA’s figures showed not-for-profit and in-house corporate funds dominated the top performers. Of the 50 funds with the best returns between 2007 and 2011, 42 were not-for-profit or in-house — led by stevedoring-linked CBH Superannuation (about 7.1% five‑year returns), followed by the Goldman Sachs JBWere staff fund (around 5.2% annual), Commonwealth Bank staff fund (4.7%), and the Reserve Bank staff fund (4.4%).
How have superannuation returns trended over the past five and eight years?
According to APRA, annualised returns averaged just 2% over the past five years, while longer-term performance improved to average about 5% over eight years.
How much money is held in super funds that delivered below‑average returns?
APRA’s figures show about $346 billion of Australia’s superannuation savings are tied up in funds that delivered below‑average returns over the five‑year period reported.
Were retail super funds competitive in the APRA performance rankings?
Retail funds generally lagged the not‑for‑profit and in‑house funds in the APRA rankings; Challenger Retirement Fund was the only retail fund to make the top 50, with an average five‑year return of about 4.5% to 2011.
Which super funds were among the poorest performers in the APRA data?
Some of the worst five‑year performers named in the APRA data included Motor Trades Superannuation Fund, which averaged a loss of 0.8% over five years, and the 4,200‑member LifeFocus retail super fund, which posted about −6.3% over the same period.
What do the APRA results mean for people who don’t choose their own default super fund?
The APRA results feed into a Productivity Commission review of how default super funds are chosen; currently employers and unions select a default, and Industry Super Network’s CEO David Whiteley said the stronger results from not‑for‑profit funds have ‘obvious and profound’ implications for ensuring employees who don’t choose a fund end up in a well‑performing scheme.
Which industry super scheme was highlighted as a top industry performer?
The Catholic Superannuation fund was the best‑performing industry scheme named in the APRA data, with average five‑year returns of about 4.1%.
How should everyday investors read the APRA superannuation performance figures?
The APRA data show wide variation in fund performance and that short‑term (five‑year) returns can look weak compared with longer‑term (eight‑year) averages; the report also highlights that not‑for‑profit and in‑house funds tended to outperform many retail offerings, which is relevant for anyone reviewing their super or default fund choice.
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