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New figures show industry super funds continue to outperform bank-owned super funds. Is anyone asking why?

  Published: 21 Jun 2017

With new figures showing - once again - that not-for-profit industry super funds continue to outperform bank-owned funds, policy makers should start demanding answers, says Industry Super Australia (ISA). 

According to the independent SuperRatings agency, for the decade ending 31 May 2017, industry super funds in the SR 50 Balanced Option have outperformed bank-owned super funds on average by two per cent.

With two per cent difference possibly costing $200,000[1] in savings at retirement for the average earner, ISA public affairs director Matt Linden said it was time to start demanding answers of bank-owned super funds.

“The performance figures highlight the consistent edge not-for-profit industry super funds have over bank-owned super funds in delivering for their members,” said Linden.

“With pension access tightening, compulsory superannuation is becoming increasingly central to the wellbeing of Australians as they age”.

“This chronic under-performance of retail funds, which hold just over a quarter of all super savings, should be a big concern for forward-thinking policy-makers,” he said.

“But when it comes to returns on the retirement savings of hard working Australians, the silence is almost deafening,” said Linden. 

Outperformance 2.21 1.94 1.92 2.24 2.17
  1 Year % 3 Year % 5 Year % 7 Year % 10 Year %
Industry Super Funds 9.78 7.92 10.34 8.71 5.11
Bank-Owned Super Funds 7.57 5.98 8.42 6.47 2.94

Source: SR50 Balanced option (industry v bank option median) to the period ending 31 May 2017

[1] ASIC Money Smart calculator - start age 27, retire age 67, income $80,000 starting balance zero. Balance with investment returns of 4.5% = $442,402. Balance with investment returns of 6.5% = $663,270. Difference= $220,868 (Current dollars CPI deflated).

Matthew Linden is available for interview. Media contact: Phil Davey 0414 867 188

Past performance is not a reliable indicator of future performance.

*The above material, whilst correct at the time of publication may include references or statements which are no longer current.

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