ASFA: Super returns not so bleak
70 per cent of Australian workers will receive a positive return on their superannuation funds for the 2002/03 financial year according to theAssociation of Superannuation Funds of Australia(ASFA) - contradicting reports that most super funds will post negative returns this year.
The association says preliminary figures it has compiled group indicate those receiving positive returns can expect them to be in the order of 1.5 to 4 per cent.
ASFA chief executive Philippa Smith says the negative returns that have been widely reported relate to growth orientated super funds.
However these are held by a small number of Australians, according to Smith, as around 70 per cent of super fund members hold their assets in default and/or balanced options, which will report positive returns.
Smith says this will represent about 6 million super fund members of the 8 million employed Australians with superannuation, adding that nearly all of the 10 largest industry funds are set to post positive returns alongside the accumulation divisions of public sector funds.
These numbers have been boosted by the fact there are half a million accounts in defined benefit funds and around three and a half million accounts where fund members are protected in whole or in part from fluctuations in investment returns.
Despite the good news Smith says the results are not final as a number of funds have yet to publish their predicted returns while others have yet to determine crediting rates for the financial year but the number of accounts with positive investment returns is expected to rise.
As a result of the preliminary figures ASFA will research why industry and public sector funds have delivered better returns than retail master trusts for the last financial year, with preliminary estimates for retail superannuation funds indicating an average investment return of negative 2 per cent.
The association has already flagged higher administration and investment costs as a probable reason along with larger allocation of assets to domestic and international shares.
AUTHOR
Jason Spits
Recommended for you
Far too few wealth managers are capitalising on the opportunity presented by disruptive technology to deliver personalised investment solutions to the mass affluent demographic, according to PwC.
With over half of advisers using managed accounts, HUB24’s head of managed portfolios has unpacked the benefits driving their usage and how they can be leveraged by advice practices.
The FSCP has announced its latest verdict, suspending an adviser’s registration for failing to comply with his obligations when providing advice to three clients.
ASX-listed platforms HUB24, Netwealth, and Praemium have used their AGMs to detail how they are using artificial intelligence to improve their processes and the innovative opportunities it presents.
