Industry super funds outperform retail funds

 21 August 2012

The superiority of the industry superannuation governance model with union and employer-representative trustees  has again been highlighted by the latest research out today from ratings agency Superratings, which shows that on the SR50 Balanced Index, industry superannuation funds outperforming retail funds over one, three, five, seven and ten years to 31 July 2012.

Commenting on the new figures, Industry Super Network (ISN) CEO David Whiteley said the results  illustrated  that  industry  superannuation  funds,  run  only  to  benefit  members  and  with  the representative trustee system as the centrepiece of their governance, were the superior model for both individual workers and aggregate national savings.

“The long term net returns delivered by super funds has a measurable impact on members’ retirement savings and national savings.“

“A higher national savings pool will reduce the burden on future taxpayers. Government policy must be orientated to maximizing the effectiveness of the compulsory super system logically measured by long term net returns.

On average retail funds – largely owned by banks – have underperformed industry super funds over the short, medium and longer term.  

ISN modeling of APRA data has shown that over a fifteen year period to 30 June 2011, if the retail super fund sector had earned industry super fund average returns, Australian retirement savings would currently be $75 billion higher.

“Industry super funds are run only to benefit members and are not run to pay dividends to shareholders. This is one reason why they continue to out-perform retail super funds largely owned by banks.”

“Industry  super  is  a  great  Australian  success  story,  an  example  of  unions  and  employers  working together to maximize the retirement savings of Australian employees. The success of the system is evident in their continued out-performance when compared to retail super funds”, said Mr. Whiteley.

Superratings findings – Balanced SR50 to 31 July 2012 

 

1 year

3 year

5 year

7 year

10 year

Industry

3.1

5.6

0.4

4.3

6.3

Retail

2.7

5.0

-0.9

2.4

4.4

Difference

0.4

0.7

1.3

1.9

1.9

Further information:  www.industrysupernetwork.com