According to a recent report from Chant West, the non-profit superannuation funds beat for-profit funds by an average of 1.5%, returning 6.7 percent compared to 5.2 percent for retail super funds. The Chant West survey compares the performance of all balanced growth funds. Balanced growth funds are those funds with between 61% to 80% of capital invested in growth assets like shares and property; it is also where the majority of workers have their super invested.
These results come as the Turnbull Government is proposing a raft of legislation that would significantly re-shape how superannuation works.
According to the Turnbull Government, it’s a matter of urgency that industry superannuation funds, like HESTA, have their equal representation model broken up. Industry superannuation funds typically have boards that are comprised of half employer and half union representatives. Now the Turnbull Government wants to change that and force industry superannuation funds to have one third of directors being ‘independent’ along with an ‘independent’ chair.
So far there has been no rational explanation given by the Government for wanting to make such massive changes to superannuation. But it is clear that the Government has completely ignored that industry superannuation funds have consistently out-performed retail superannuation funds. There has been no evidence provided that changing the governance arrangements for industry super funds will result in stronger performance or improve returns.
What it does look like is that the Turnbull Government is prepared to significantly change superannuation in Australia that will predominantly benefit retail superannuation funds and the Big 4 banks rather than ensuring the best possible growth in retirement savings.
NOTE: This should not be taken as advice on your superannuation. The Union does not provide advice about superannuation and members should consult their superannuation fund manager about their superannuation and the arrangements that best suit their individual situation.