Selecting the wrong super could cost the average worker $600,000 in retirement
Mon 11 February 2019 - 1:43 pmNews
Research has found that poor performing super funds could cost the average Australian worker $600,000 in retirement funds.
The findings exposed by Rainmaker Information’s superannuation comparison service, SelectingSuper, revealed that if an employee selected and stayed with a poor performing MySuper default super fund their entire career they could end up with $265,000 by the time they retire, compared to $832,000 with Australia’s top performing MySuper default funds.
Rainmaker Information’s executive director of research and compliance, Alex Dunnin, said that superannuation might seem like an unfair lottery.
“What causes the damage to members’ potential superannuation savings is the huge variation between super fund returns,” he said.
“If you apply these differences in performance through a super fund member’s 45 year working life, it has terrifying implications for hard working Australians who are relying on their super fund to look after them and help them save for their retirement.”
SelectingSuper found that 10 year long-run returns on super investment varied significantly between funds with top performing MySuper default funds achieving a 7.4 per cent per annum return while the lowest performing funds were less than half that at only 3.2 per cent per annum.
“While the recent Productivity Commission recommended major reforms to the superannuation industry that should see Australia’s poorest performing super funds chased out of the market, the good news for consumers is they don’t need to wait. Switching to one of Australia’s best funds is easy and consumers can do it today.”
“But first they should check how their super fund is performing against industry averages across three, five or maybe even 10 years. If their returns are consistently below average it may be time to think about switching.”
|Australia’s SelectingSuper Top 10 Best in Show by 20 year Nominal returns at 30 June 2018|
|Superannuation Fund||Return (pa.)|
|7.||AustSafe Super (now part of Sunsuper)||7.7%|
|9.||Cbus Industry Super||7.6%|