Superannuation is being damaged by a lack of member confidence stemming from misinformation amid a tough market cycle, a number of industry bodies have said.
However, rather than being concerned, the Association of Superannuation Funds of Australia (ASFA) said members should be more positive and focus on superannuation as an important long-term investment.
"There is a lot of misinformation appearing in the press. There are a lot of statements by people saying they are better off putting their money in a bank," ASFA chief executive Pauline Vamos told InvestorDaily.
"We're just trying to counter some of the wrong statements out there. People get scared, then they lose confidence in the system and confidence in the industry and that is not a good thing.
"We are saying 'you can be confident, your money is secure, your money is getting a return, it's working for the whole economy, it's saving for your retirement, this is a thing to be positive about, not negative about'."
The Financial Services Council (FSC) said the superannuation market was cyclical and while the market was low at the moment, it had followed a period of strong growth.
"[It is] fair to say that over a period of time, people's investments go up and down, so that risk is in any asset you purchase," FSC chief executive John Brogen said.
"So what we've seen at the moment is a higher savings rate since 1985, but the amount of cash deposits has exceeded the amount of superannuation in the last couple of months. So people are saving, but they are choosing to save outside of super.
"There is no doubt at the moment that the poor performance of the markets is reflected in people's concern about the performance of their superannuation. But markets are highly cyclical. Up until recent years we've had 15 years of double-digit growth. So it's a cycle, unfortunately we are in a tough section of that cycle."
ASFA said in the long-term, the majority of people in the majority of funds were better off with their retirement savings in superannuation than putting all their money in a term deposit.
The accumulation of superannuation not only assisted Australians in retirement, it also boosted the Australian economy, increasing the nation's gross doemstic product, creating jobs and providing much-needed private and public infrastructure investment, it said.
ASFA's call for more confidence in superannuation is supported by Superratings' most recent report, which shows a recovery in the super fund market in the past month.
The median balanced fund in October increased 2.8 per cent from the previous month and 0.8 per cent year-on-year.
"Given the surge in equity markets globally, it was no surprise to see funds biased towards growth assets leading the performance tables in October, with the median growth fund (77-90 per cent exposure to growth assets) returning 3.6 per cent," Superratings said.
