There is little correlation between the size of a superannuation fund and the overall net benefits to members, according to a new SuperRatings report.
SuperRatings’ annual review of the superannuation industry – which assessed more than 620 superannuation products, covering 21 million members – found that there is no correlation between fund size and member benefits.
Adam Gee, SuperRatings' chief executive, said, “the annual review reinforces our earlier analysis that size of fund does not necessarily mean a better net return for members”.
“Although size can offer cost savings and benefits of scale, this does not always mean large funds outperform smaller funds across all other criteria. Many smaller funds provide excellent value for money,” Mr Gee said.
Mr Gee also said the government’s focus on fees as an indicator of value is misguided.
“Instead we apply a more thorough analysis, reviewing funds across a multitude of areas including investments, fees, insurance, administration, member servicing, advice and governance," he said.
“Each of these areas, individually, can have a big impact on the retirement benefit of all fund members and must be part of every assessment."
SuperRatings founder Jeff Bresnahan also indicated that the pace of industry improvement needs to quicken.
“We continue to see incremental improvements across the industry, which is good news for most Australians. However, more importantly we need regulatory stability instead of constant changes from the government of the day,” Mr Bresnahan said.
“This constant uncertainty creates a loss of confidence which can have a big impact on individual members and their ability to trust and plan for their future.
“Let the funds get on with what they do best, in a stable and certain environment, as they continue to improve the long-term benefits for working and retired Australians,” he said.
APRA has announced that it will watch super funds more closely and has not ruled out naming and shaming underperforming funds. ...
The head of Australia’s largest industry superfund has warned of the significant changes afoot for those working with other people’s ret...
AMP has reported seeing a spike in queries about early access to super in February. ...