Superannuation industry funds have taken out the top five positions in satisfaction with financial performance in the six months to July 2017, according to Roy Morgan’s latest research on the issue.
The survey found that Queensland-based fund Qsuper topped the table with 73.3 per cent of members satisfied with its performance. The country’s largest fund AustralianSuper came in at number five at 60.5 per cent.
The top-performing retail fund was Colonial First State which came in sixth with a satisfaction ratio of 60.3 per cent.
Satisfaction levels among members are crucial with memberships increasingly contested and members facing significant changes to the system.
“With the increasing complexity of superannuation as a result of many rule changes, it is important that funds keep track of how their members perceive their funds are performing,” said Roy Morgan research chief Norman Morris.
The research highlights that the disconnect between the numbers of people and the size of fund balances in the system. The largest slice of fund members, 48.6 per cent, have fund balances of between $5000 and $99,000. But that cohort only makes up for 14.5 per cent of funds under management.
The largest single slice of funds under management, 36.7 per cent, is in the balance size band between $250,000 and $699,999 but that only accounts for 14.1 per cent of fund members. And the top balance category, $700,000 or above, while accounting for 23.8 per cent of funds under management, takes in only 3.9 per cent of super fund members.
The wash-up from that reality means that 59.8 per cent of fund members have less than $100,000 in super and so account for only 14.7 per cent of monies in the system.
That puts into a new perspective the debate around the Turnbull government’s superannuation reforms which tax the income from accounts in pension phase with $1.6 million and over under management. Dissent within Coalition ranks saw parliamentarians threaten to cross the floor to vote against the legislation, which was ultimately passed.
Roy Morgan figures showed that self-managed super funds had the highest level of satisfaction with 73.8 per cent overall and 85.2 per cent for those with balances over $700,000. However SMSFs are heavily slanted to high balance users and account for only 7 per cent of all superannuation accounts while making up 31 per cent of monies in the system.
The most evenly balanced part of the sector is balance levels of between $100,000 and $249,000. They account for 24.2 per cent of members and 24.8 per cent of funds under management.
Overall satisfaction with retail funds, 58.7 per cent, was slightly higher than industry funds, 58.2 per cent, over the half. However industry funds have continued to outperform their retail counterparts.
In the year to June retail funds returned 7.8 per cent while industry funds returned 10.7 per cent.
An Industry Super Australia analysis of the APRA data to June 2017 shows that not-for-profit industry funds continue to outperform bank-owned retail funds by a widening margin – 2.89 per cent over one year; 2.44 per cent over three; and 2.13 per cent over five years.