Last year was a turbulent time for Australians’ superannuation, with millions of people making early withdrawals, totalling $36.4 billion, under the Australian Government’s COVID-19 early release scheme.
Some people also felt the effect of share market volatility caused by the pandemic. While the average one-year return was 3.3% for balanced return super products on Canstar’s database in 2020, some people experienced negative returns.
If you’re focussed on growing your balance and are thinking about switching super funds, it’s important to remember that super is a long-term investment. It can be worth looking at a fund’s long-term track record and whether it has a history of delivering high returns, remembering that past performance is not a reliable indicator of future performance. It can also be a good idea to consider factors including fees and product features. Canstar’s Superannuation Star Ratings and Outstanding Value Superannuation Awards can make it easier to compare and shortlist funds based on these factors and more.
Canstar’s 2021 Outstanding Value Superannuation Awards
Canstar’s Outstanding Value Superannuation Awards recognise the super funds found to provide exceptional value to customers across the range of ages and balances considered in Canstar’s Superannuation Star Ratings. Each superannuation product considered in the Star Ratings has been assessed based on factors such as investment performance over a seven-year period, fees and product features.
As part of the Superannuation Star Ratings, Canstar has rated 64 products from 57 providers on our database. Based on this analysis, Canstar has recognised six providers with an Outstanding Value Superannuation Award.
In alphabetical order, the winners are:
These products all continued their overall strong performance in 2021, having each received Canstar’s Outstanding Value Superannuation Award in 2020.
AustralianSuper has received an Outstanding Value Award for its superannuation product for the past 10 years. AustralianSuper is the country’s largest super fund in terms of members and assets under management.
AustralianSuper offers members a range of investment options, including its default Balanced option and other ‘PreMixed’ options. Members can also invest in ‘DIY Mix’ and ‘Member Direct’ options, which offer greater flexibility to members to choose how their money is invested. Additionally, AustralianSuper offers online learning tools and advice options, ranging from super webinars to simple super advice and comprehensive financial advice for a fee.
Catholic Super Employer Sponsored
This is the third year Catholic Super has received this Award. The industry super fund was initially established to benefit staff in Catholic schools; however, membership is now open to all Australians.
Catholic Super members can choose from a variety of investment options, including pre-mixed options created by the fund to suit different member preferences and ‘Build Your Own’ options, which allow members to invest directly in different asset classes. Catholic Super also offers members a range of online resources; as well as access to super seminars and personal advice from financial planners for a fee, following a free initial consultation.
Hostplus Personal Super
This is the fourth year in a row that Hostplus has won this Award. Hostplus was traditionally a super fund for workers in the hospitality, tourism, recreation and sport industries, but it has opened up its membership to become one of the country’s largest funds, with more 1.2 million members as at 30 June, 2020.
Hostplus offers members a broad range of investment options, including pre-mixed options, sector options, individual manager options (where some or all of your portfolio is overseen by a fund manager) and its ‘Choiceplus’ investment option, which allows members to take a more active role in their investments.
Statewide Super Employer-Sponsored
Statewide Super has won an Outstanding Value Award for the fourth year in a row for its employer-sponsored product. Statewide Super is a South Australian-based industry super fund with membership open to everyone.
Statewide Super offers six ready-made diversified investment options based on risk profiles and other factors, as well as four single asset class options. The fund also offers a range of advice options including phone advice and face-to-face financial planning services (for a fee following a free initial consultation).
Sunsuper for Life
This is the 10th year that Sunsuper has received this Award. Sunsuper is an industry super fund and its membership is open to the public.
Sunsuper offers a wide range of investment options to suit different risk profiles and retirement goals. This includes ready-made diversified options and single asset class options. Sunsuper offers online resources such as calculators, as well as a range of advice options.
VicSuper FutureSaver PersonalSaver
This is the second year in a row that VicSuper has won an Outstanding Value Superannuation Award. Last year, it merged with Aware Super (formerly First State Super) to become Australia’s second largest super fund in terms of assets under management.
VicSuper members can choose from a range of pre-mixed investment options, including the default Growth (MySuper) option. Members can choose specific asset class options, such as Australian Shares. VicSuper also offers a variety of online resources and advice options, ranging from simple personal advice to more complex advice where fees may be payable.
What difference could an Award-winning super fund make?
Canstar has compared the performance of the Award-winners against other funds on our database. We found that the Award-winners had an average five-year return of 8.1% per year to the end of 2020. In comparison, the average return of all rated products was 7.0% per year. These figures are based on investment options on Canstar’s database for a 35-year-old and are net of fees and tax.
Although this may seem like a small difference, it can add up by the time you reach retirement age. According to Canstar’s research, a 35-year-old with a starting balance of $60,000 and annual net investment returns of 7.0% is projected to retire at 67-years-old with a $772,349 balance. If our hypothetical 35-year-old was with a fund with annual net investment returns of 8.1%, they are projected to retire with a balance of $993,176. That’s a difference of over $220,000. The estimated retirement balances are based on a starting gross annual income of $74,516 per ABS Median Weekly Earnings (full time workers), growing 2.5% annually (per RBA Target Inflation). Please see the important information at the bottom of this article for more information about how this hypothetical example was calculated.
Regulation of super funds in Australia
The Australian Securities and Investments Commission (ASIC) recently outlined its key priorities and plans for regulating the sector. ASIC’s prioritisation focuses on two responses: the more immediate impacts of COVID-19 including the associated potential consumer harm, and regulatory work to address longer-term consumer harms. In parallel ASIC has also taken action against a number of industry superannuation funds and warned of further enforcement actions to come.
Canstar will closely monitor any changes in regulations and the outcomes of any regulatory actions. Canstar will consider adjusting its calculations and approach to account for changes and outcomes in the regulatory environment.
For more information about how Canstar’s Superannuation Star Ratings and Awards are calculated, view the methodology.
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