Non-Profit Industry Super Returns 50pc More Than Retail Funds

Another good year for super funds has helped push account balances to almost double what they were 10 years ago. Workers who invest with non-profit industry superannuation funds have double the savings at retirement than those who put their money into a retail fund, an Australian university study has found.

Low interest rates around the world have induced many sharemarkets in developed countries, including Australia, to move sharply higher during the past financial year.

As the typical balanced investment option, where most people have their super, has about half its money invested in Australian and global shares, fund members have enjoyed a second financial year of supersize returns.

The median-performing balanced option returned 12.7 per cent for the year to June 30, 2014, following the 14.7 per cent return for the year to June 30, 2013. It is the fifth back-to-back year of positive returns with the average annual five-year return to June 30 this year of 9.2 per cent. SuperRatings data also shows the 10-year return is 6.8 per cent. With inflation over the 10 years averaging about 3 per cent, most balanced investment options have met their performance targets, which is usually to beat inflation by at least 3.5 percentage points. SuperRatings data shows a starting balance of $100,000 in 2004 would now be worth about $190,000. That would be even higher for those fund members still working as the balance does not include compulsory super contributions.

Telstra Super Corp Plus Balanced produced a chart-topping performance of 15.8 per cent for the year to June 30, 2014 after taking fourth spot for the year to June 30, 2013 with a return of 16.9 per cent. Intrust Core Super Balanced takes second spot for the year to June 30, 2014 with a return of 14 per cent. Third spot is shared by UniSuper Accumulation (1) Balanced and AustralianSuper Balanced with both returning 13.9 per cent. The Telstra fund is for employees of the telecommunications giant but it is open to former Telstra employees and their families.

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