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The best and worst super funds in 2022

Most people don’t engage with their super until they’re about to retire. But APRA’s annual performance report on super funds shows why it’s important that you do. Not all super funds are equal and there is a big difference between the best and worst funds. 

A few years ago, the Productivity Commission reviewed the super system and found it to be highly inefficient.  It estimated the level of wasted fees and insurance premiums to be $2.6 billion per year. 

As a direct result of this finding, the Morisson government introduced an annual performance test of super funds to increase transparency and accountability.  And it seems to be working. According to the Grattan Institute, the increased scrutiny has already led to fee reductions in the order of $100 million. 

The best funds
 

Measured over an eight-year period, UniSuper was the best performing super fund in Australia this year, outperforming the benchmark by 1.56% per annum. Other strong performers included Hostplus, Australian Retirement Trust and Australian Super, which all outperformed the benchmark by more than 1% a year.

Interestingly, an AMP product was the third best performer according to the APRA test.  AMP’s Macquarie Group MySuper outperformed the benchmark by 1.22% a year.

The worst funds

Scandal plagued super fund Energy Industries Super Scheme (EISS) was called out as the worst performing fund in the country.  It underperformed it’s benchmark by -1.49% a year.  Other trustees with super funds that were identified as significant underperformers included Westpac’s BT and Equity Trustees.

Other people’s money

It appears that the late economist Milton Friedman was right when he observed, “nobody spends somebody else’s money as carefully as he spends his own”.

There is no place for complacency when it comes to investing.  If you are in a fund that failed APRA’s performance test, then it has already cost you money and it is time to review your holdings.

Free to choose

One or two percentage points may not sound like much, but the compounding effects of being in a good fund can make a real difference to your retirement outcomes.  

Granted, there is more to selecting a fund than APRA’s performance test methodology, but it is an important input.  At When Financial Solutions we have no ties to any institutions or super funds. We are independent and unbiased, so we are free to recommend the best performing super funds for your circumstances.  It’s not a matter of ‘if’, but ‘when’.

 

This article is general and does not consider your personal circumstances so it may not be appropriate to you.  If you would like advice specific to you, please give us a call.

 

 

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