How to tell if your super fund is a dud
YESTERDAY, we learned Australia's $2.6 trillion superannuation industry was a shambles - but how do you know how your own fund stacks up?
According to the damming Productivity Commission report released yesterday, the super system is in dire need of an overhaul, with unnecessary fees and multiple accounts some of the biggest concerns.
The Commission also revealed that the difference between the top and worst-performing funds can be staggering, with an average worker defaulted into a poorly-performing fund ending up with almost 40 per cent less in the kitty when they retire.
It also estimates that a 21-year-old with a starting salary of $50,000 will lose out on $407,000 in retirement savings thanks to the current broken system, with a a 55-year-old today having $61,000 less on average upon retirement due to the industry's various loopholes.
And the problem is a common one, with the Commission finding up to one in four Australian super funds "persistently underperform".
So how do you know if your fund is a winner - or a dud?
According to the Commission, the key number to look out for is 5.6 per cent per year - that's the average annual return from the country's biggest funds, so if yours hasn't reached that threshold year after year, it might be time to consider a switch.
And according to an analysis of Australian Prudential Regulation Authority (APRA) statistics conducted by The Australian, these are the top and worst-performing superannuation funds, based on their 10-year returns.
Goldman Sachs & JBWere Super Fund: 7%
Care Super: 5.5 %
Commonwealth Bank Super Group: 5.4%
Building Unions Super: 5.2%
MyLifeMyMoney Superannuation Fund: 5.2%
Energy Super: 5.1%
LGIAsuper: 5.1 %
Super Safeguard Fund: -5.7%
Lifefocus Super Fund: -1.4%
Aon Eligible Rollover Fund: 1.1%
Netwealth Super: 1.2%
Smartsave 'Member's Choice' Super: 1.5%
Super Directions Fund: 1.7%
Oasis Super: 1.7%
EmPlus Super: 1.8%
AMG Super: 1.8%
Symetry Personal Retirement: 1.8%
According to Commission deputy chair Karen Chester, a third of Australian superannuation accounts - around 10 million - are the result of "unintended multiples", with many workers ending up with several accounts when they switch jobs.
"The excess fees and insurance premiums paid by members on those accounts amount to $2.6 billion every year," Ms Chester said.