Australian Superannuation Funds Deliver Dismal Returns

Chris Bowen, Federal Minister for Superannuation says he has a lot of work ahead of him, after the results of a study suggest that the retirement savings of Australians only returned 3 per cent a year for over a decade.

An ABC analysis of official statistics released by the Australian Prudential Regulation Authority (APRA) that go as far back as 1997 suggest that for the 13 year period the superannuation system delivered compound returns of just 3.04 per cent.

When Mr. Bowen was queried over the poor results, he said his government was trying to improve the super system.

“I think there is a lot more to do in super, we need to drive down those fees, which would increase returns.” Mr. Bowen said.

The Cooper Review, a year long formal review of the $1.2 trillion Australian superannuation industry was released in July, which Mr. Bowen says examined the system holistically and proposed reforms that have been contentious.

One recommendation the government is considering is ensuring fees paid are linked to performance.

“The Cooper review does deal with performance fees, it does indicate that they need to be standard across the board to ensure that performance fees are paid when performance is good,” he said.

“That is certainly something we are pursuing.”

Compare Australian Home Insurance Deals