In the past several months, the banking royal commission and Productivity Commission have shone a spotlight on superannuation issues such as underperforming funds, fees for no service and members unknowingly holding multiple accounts.
On top of this, the Australian Prudential Regulation Authority (APRA) has been cracking down on underperforming super funds with 13 funds having either left or are in the process of leaving the sector.
In light of the ongoing super shakeup, you may be wondering what makes a good super policy and how to find one?
Canstar’s Superannuation Star Ratings 2019 recognises funds that provide members with outstanding value.
Find out which providers came out on top below.
Canstar’s 2019 Superannuation Star Ratings
Canstar has researched and rated 67 superannuation products from 59 providers to determine which offer outstanding value to help consumers narrow their search.
Canstar’s Superannuation Star Ratings involve a sophisticated and unique ratings methodology, assessing 25 consumer profiles and comparing factors such as investment performance, fees, insurance offerings and product features.
After extensive analysis, Canstar has announced six 5-Star Rated super products. They are (in alphabetical order):
The Canstar Research Team found that all six were standouts when it came to their combination of performance returns and features.
AustralianSuper – AustralianSuper
AustralianSuper has displayed consistently strong performance returns over the past five years. The Canstar Research Team found that from 2014-2018, AustralianSuper’s returns were 1.75% higher than the market average. The market average is calculated using all 67 default products under consideration from Canstar’s database.
In terms of insurance, AustralianSuper’s default option includes death, income protection and TPD cover. However, Canstar Research said this extensive insurance coverage comes with associated premiums that were more expensive than the market average.
AustralianSuper also performed strongly across all feature categories, particularly when it came to financial advice and education. Specifically, AustralianSuper offers an extensive suite of calculators and educational resources to help members with their future investment options.
Catholic Super – Catholic Super Employer Sponsored
Catholic Super introduced a new default option product in 2019 which Canstar Research said substantially improved in its overall performance and moved it into the 5-Star category. Unlike the other award winners, Catholic Super Employer Sponsored now applies age-based asset allocation. This means younger members in their 20s, 30s and 40s have an aggressive asset allocation and older members in their 50s and 60s have a balanced allocation.
Catholic Super’s strong overall performance returns were largely fuelled by the performance it delivered to its younger members relative to most other funds, Canstar Research said. For example, in 2018, the 20s, 30s and 40s had performance returns 1.56% above the market average, while 50s and 60s had performance returns 0.11% below the market average. Looking at the overall performance of all age groups over the past five years, Catholic Super had the highest net performance returns out of all of the award winners, coming in at 2.55% above the market average. The market average is calculated using all 67 default products under consideration from Canstar’s database.
Catholic Super maintained above average insurance costs due to death, income protection and TPD insurance cover being included in its default investment option. Again, having more extensive coverage than average means there are higher associated premiums, Canstar Research said.
Catholic Super performed well across all feature categories and in financial advice. Canstar Research noted it has a limit on personal advice fees, which could help protect members from eroding their balance with excessive fees.
Hostplus Super – Hostplus Personal Super
Hostplus Personal Super also had consistently high performance returns. Across the previous five years, Hostplus Personal Super’s average performance returns were 1.87% above the market average. The market average is calculated using all 67 default products under consideration from Canstar’s database.
For insurance, Hostplus Personal Super maintained above average costs. Hostplus Personal Super offers default death and TPD cover, however it doesn’t offer default income protection.
On the features side, Hostplus Personal Super scored above average in all categories. Canstar Research said it does exceptionally well in member access, where it received close to the maximum score across all products. This was driven by Hostplus’ extensive and relatively easy phone and online access, Canstar Research said.
Intrust Super – Intrust Super Executive Super
Intrust Super Executive Super moved into the 5-Star Rating category in 2019, following its improved performance in feature scores and above average net returns.
Intrust Super’s feature performance was boosted by its robust insurance offerings, Canstar Research said. Intrust Super offers extensive default death, income protection and TPD cover compared to its competitors.
On top of this, Intrust Super offers a competitive insurance offering, with premium pricing coming in below average, Canstar Research found. The pricing also becomes progressively more competitive as your balance and age increases.
In terms of performance, from 2014 to 2018 the product delivered an average annual return 2.04% higher than the market average. The market average is calculated using all 67 default products under consideration from Canstar’s database. In 2014, its performance returns were 5.06% above the average.
Statewide Super – Statewide Super Employer Sponsored
Statewide Super Employer Sponsored has steadily displayed above market average performance returns. The market average is calculated using all 67 default products under consideration from Canstar’s database. For the past five years, its performance returns have been an average of 1.86% more than the market average.
According to Canstar Research, Statewide Super Employer Sponsored maintained higher than average insurance costs, with its default option including death, income protection and TPD cover.
While it had strong performance across all feature categories, Canstar Research found that it truly excelled relative to its peers in making financial advice and education available to its members. It offers personal advice through a range of mediums as well as calculators and educational content.
Sunsuper – Sunsuper for Life
For the past five years, Sunsuper for Life’s performance returns have been 1.12% above the market average, Canstar Research said. The market average is calculated using all 67 default products under consideration from Canstar’s database.
Sunsuper for Life has maintained just above average insurance costs. While it doesn’t offer default income protection, Sunsuper does offer very high sum insured amounts compared to most other super funds on its default death and TPD cover.
While Sunsuper for Life performed strongly across all feature categories, Canstar Research said it truly excelled in the financial advice and education category. It’s important to note that the researchers increase the weighting of financial advice and education and decrease the weighting of insurance when considering older people.
Below is a list of superannuation funds that received an overall 4-Star Rating based on the strong value they provide (listed in alphabetical order)
|Australian Catholic Superannuation||Australian Catholic Superannuation|
|CareSuper||CareSuper Employee Plan|
|Cbus||Cbus Industry Super|
|Club Plus Superannuation||Club Plus Super Personal Division|
|Energy Super||Energy Super|
|Equip Super||Equip MyFuture|
|First State Super||First State Super – Personal|
|First Super||First Super Employer – Sponsored|
|HESTA||HESTA Personal Super|
|Intrust Super||Core Super|
|Prime Super||Prime Super Fund|