New data from the “Compare the Pair” model run by SuperRatings has again demonstrated after-fee outperformance of Industry SuperFunds compared to retail super funds, which are generally owned by the big banks.
The SuperRatings model compares the average performance of the main balanced investment option of Industry SuperFunds against the average performance of retail funds on a net-benefit basis over a 10-year period - that is, after fees have been deducted from any investment returns.
Because the performance comparison underlying “Compare the Pair” has always been based on returns net of all fees and costs, the results will not be affected by ASIC’s new fee and cost disclosure guidance.
For the 2016/17 year, the SuperRatings model shows that, on average, the 16 Industry SuperFunds delivered a higher balance for members over the last ten years after fees and investment performance were taken into account, compared to the average outcome of 77 retail funds tracked by SuperRatings.
For a sales representative with around $75,000 in super and earning the average salary in 2008, the “Compare the Pair” model shows they would be around $2000 a year better off if they had their super in the average Industry SuperFund.
|Job and salary 2008||Super balance 2008||Average Industry SuperFund (16)||Average retail fund (77)||10 year ISF outperformance|
|Benefit after fees||Balance 2017||Benefit after fees||Balance 2017|
|HR Manager on $90,000||$50,000||$68,161||$200,678||$49,703||$182,220||$18,458|
|Sales Rep on $59,100||$74,600||$70,028||$198,814||$49,157||$177,943||$20,871|
“Using a net benefit, or after fee calculation, helps demonstrate to consumers how hard their fund is working for them after everything is taken into account”, Industry Super Australia’s director of public affairs, Matt Linden, said.
Linden confirmed that ASIC’s new fee disclosure arrangements will not impact the “Compare the Pair” model because the comparisons have always been on returns net of all fees and costs.
The modelled outcomes shows 10 year average difference in net benefit of the main balanced options of 16 Industry SuperFunds and 77 retail funds tracked by SuperRatings, with a 10 year performance history, taking into account historical earnings and fees – excluding contribution, entry, exit and additional advisor fees – of main balanced options. Outcomes vary between individual funds. Modelled as at 30 June 2017.
Assumption details are available here
Matt Linden is available for interview. Media contact Lis Bowdler 0412 112 374
Industry Super Australia provides policy, research and advocacy on behalf of 16 not-for-profit Industry SuperFunds who are the custodians of the retirement savings of five million Australians
*Past performance is not a reliable indicator of future performance and it should never be the sole factor when selecting a fund. You should consider the Product Disclosure Statement available from individual funds before making an investment decision.
Industry Super Australia Pty Ltd ABN 72 158 563 270, Corporate Authorised Representative No. 426006 of Industry Fund Services Ltd ABN 54 007 016 195 AFSL 232514