The Association of Superannuation Funds of Australia (ASFA) has refuted criticism of the Australian superannuation system, saying it is working by producing superior returns and reducing fees.
ASFA said that “misleading analysis led to sensationalist newspaper headlines that only served to alarm Australians and detrimentally impact retirement outcomes,” without naming the newspapers.
ASFA rejected that the Australian super system lagged behind the rest of the world, saying it had instead delivered “superior” returns. The organisation pointed to statistics that, over the five years to 2017, Australian super funds had the highest average investment returns in the OECD.
Over the last five years returns for Australian super funds averaged 10.4% a year after fees, which is 8.2% above inflation over the same period.
“Fees for managing superannuation fund investments are comparable to those in other countries with high levels of investments in equities,” said ASFA.
“It is important to compare like with like when making fee comparisons. For example, investing in government bonds may come with a lower fee, but Australian super funds achieve high returns from unlisted infrastructure, property and other investments and these cannot be obtained by investing in indexed funds.”
ASFA also pointed to a reduction in super fund fees, following reforms including MySuper.
“Superannuation is working. An increasing number of retirees now have significant private income above the Age Pension, meaning they achieve a comfortable standard of living in retirement, rather than just getting by.”
“The Australian superannuation system is one of the very best in the world and while there is always room for improvement, it is important to get the facts straight, because not doing so simply reduces confidence in the system, disengages the community and leads to worse outcomes in retirement.”
The Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry is set to turn its attention to superannuation in hearings starting on August 6.