Super fund size and value not linked, says SuperRatings

superannuation fund size and value to members, SuperRatings, fees, regulatory stabilitySuperRatings has found “little correlation” between the size of a superannuation fund and the net benefit to members.

“While large funds generally display the benefits of scale, many smaller funds provide excellent value for money,” said SuperRatings.

The latest review of over 620 super products, covering 21 million members, “found fees alone are not the best criteria to judge good value.”

“The annual review reinforces our earlier analysis that size of fund does not necessarily mean a better net return for members,” said SuperRatings chief executive, Adam Gee.

“Although size can offer cost savings and benefits of scale this does not always mean large funds outperform smaller funds across all other criteria. Many smaller funds provide excellent value for money,” he said.

SuperRatings says that investment returns remain positive, while fees continue to reduce. However, insurance and administration costs “continue to be the most challenging areas for funds, with significant variations in costs and offerings between funds.”

Mr Bresnahan called for a faster improvement in these areas, along with regulatory stability.

“We continue to see incremental improvements across the industry, which is good news for most Australians, however, more importantly we need regulatory stability, instead of constant changes from the Government of the day,” he said.

“Incredibly, we have seen seven ministers responsible for superannuation during the past eight years. If a corporate entity had this many chief executives during the same period, each with their own strategies and direction, the company would be broke.”

“The superannuation system is far from broken, in fact it is booming, however, it needs consistency. This constant uncertainty creates a loss of confidence which can have a big impact on individual members and their ability to trust and plan for their future.”

“Let the funds get on with what they do best, in a stable and certain environment, as they continue to improve the long term benefits for working and retired Australians.”

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