Independent data measuring the performance of Australia’s superannuation funds shows not-for-profit industry super funds continue to outperform their bank-owned competitors in the short, medium and long term.
The latest SuperRatings’ monthly data shows, on average, industry super funds have outperformed bank-owned super funds by more than 2.2 per cent over 10 years.
For the financial year, industry super funds, which deliver all profits to members and have more substantial investments in infrastructure, private equity and other alternatives achieved a return of 3.45 per cent compared to 1.74 per cent for bank-owned retail funds.
“The sustained and significant outperformance of industry super funds results from several factors including superior governance arrangements, the fact that they are run only to benefit their members and their more innovative investment approach which optimises asset allocation to improve member returns,” said Robbie Campo, deputy chief executive of Industry Super Australia.
“In the current difficult investment climate these factors have served members’ interests well.
“The long-term net performance of superannuation funds determines how much members retire with and should be a key focus in policy and regulatory debates, especially around default fund arrangements.
“Consumer protections, including default super arrangements for the millions of Australians who choose to rely on this system, should elevate the funds which have a demonstrated track record of strong performance.
“Conversely it is obvious greater scrutiny is required for funds performing below par and enhanced consumer protections required for members in poorly performing funds or those considering selecting them.
“Long-term performance results should raise genuine questions about whether bank-owned funds can manage their conflict between generating profits for shareholders and maximising returns for fund members.”
The New Daily is owned by a group of industry superannuation funds.