The superannuation investment returns for 2014 are in – and the good news is that your retirement nest egg has probably grown by about eight per cent.

While funds did not see the astronomical double-figure returns of 2013, they nevertheless returned a healthy 8.1 per cent on average, with only one fund hitting double figures.

That 8.1 per cent does not take into account contributions. Even if you haven’t been working, your super will still have grown by that much. If you have been working, it will have grown by more.

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The latest Super Ratings report shows that industry funds did particularly well, posting average returns of 8.3 per cent, compared to 7.75 per cent for bank-owned retail funds.

The difference on 10-year returns was even more marked, with industry funds posting average annual growth of 6.75 per cent compared to retail funds’ 5.09 per cent.

Average super returns were a smooth 8.1 per cent. Photo: Shutterstock

UniSuper, the industry fund focused on employees in the tertiary education sector, posted the highest return of all balanced funds offered in the superannuation market last year.

UniSuper’s balanced fund option returned 10 per cent on the back of its strongly performing asset management teams in property and international shares.

Seven of the 10 best-performed balanced fund products were offered by industry funds, according to the Super Ratings survey.

‘Solid’ result

Last year failed to match the stellar double-digit returns of 2012 and 2013, when most asset classes recovered ground lost during the Global Financial Crisis.

Super Ratings’ director Jeff Bresnahan described the 8.1 per cent median return as a “solid” performance.

“With average account balances rising strongly, super continues to represent an increasing share of Australians’ wealth, although the variation in outcomes show that reviewing your fund now may pay off handsomely when it comes time to plan your retirement,” he said.

An ’emphatic story’ for industry funds

ISA deputy chief executive Robbie Campo said the latest performance returns demonstrated the value offered by industry funds in the superannuation market.

“These results tell an emphatic story, that if your retirement savings are with an industry super fund, they are in good hands,” she said.

“It has been consistently the case that industry super funds have recorded better median results than those from the big banks according to this independent research.”

Returns are almost guaranteed to bounce around from year to year, depending on economic conditions. Photo: Shutterstock

On Monday, the new federal assistant treasurer Josh Frydenberg flagged that the government would move to overhaul existing arrangements for selecting default superannuation funds in Australian workplaces.

Mr Frydenberg said he wanted to increase competition in the superannuation market, indicating that he would soon move to de-link superannuation system from industrial awards.

At present, workers who do not nominate a super fund are joined to a fund that is prescribed in an industrial award or enterprise agreement.

Ms Campo said the outperformance by industry funds highlighted the value of the existing system to members.

“The results shine a light on just how vital the default superannuation safety net is – a safeguard for the retirement savings of eight out of ten Australians who don’t select their own fund,” she said.

“The outperformance of industry super funds it is a clear sore point for bank-owned funds, who perennially respond by using their weight to lobby relentlessly to weaken the safety net and remove any performance filter.”

The top 10

Source: SuperRatings

If you want to know how your super has performed, go to your super fund’s website and look for tabs marked ‘Investments’ or ‘performance’. You can see the Super Ratings figures here.