The merger of the Australian Retirement Fund (ARF) and the Superannuation Trust of Australia (STA) has created an industry behemoth that seeks to serve all of Australia's working class. AustralianSuper is still working hard to keep step with the demands of its members that encompasses all industries in the country.

The positive returns for this 6-month period are a strong testament to the Fund's successful long-term investment strategy.

The company reported that AustralianSuper's balanced option returned 7.95 percent for the six months to 31 December 2010, compared to the return of the median* Balanced option of 7.04 percent over the same period.

Over a period of 10 years, the Balanced option is seen earning to 31 December 2010 at an annual average of 6.43 percent compared to a median balanced option return of 5.05 percent.

Remembering the importance of the long-term view with superannuation, it is also worth noting that since its inception in 1985 the Balanced option of AustralianSuper Fund has delivered an average return of 9.75 percent a year.

Markets returned to form

The prudent and well-balanced investments made by the Fund has earned well from the stronger economic conditions in the current market environment recently.

The company cited in its February report that investments in unlisted property and infrastructure have benefited from improved valuations and good income returns. The Balanced option's allocation to Australian shares has also paid dividends - particularly as the company have invested heavier in small companies, which have performed very strongly over the past six months. The bonds market investments for the Fund also made decent returns.

The Fund is well-prepared to tackle the next six months and ready to battle the short-term ups and downs along the way by focusing on its key investment strategy that has been producing results and dividends over the years.

How do the Cooper and Henry Reviews Impact Super

The Cooper and Henry reviews proposed changes to help Australia deal with an ageing population and the fact that many Australians simply don't have enough savings to retire comfortably. The changes aim to achieve the benefits of a low cost, high value super fund which is what AustralianSuper members already enjoy.

The Cooper Review proposed two major changes to superannuation: MySuper and SuperStream. MySuper aims to provide a true, low cost default fund while SuperStream should provide cost savings and better service by improving administrative processes.

In response to the Henry (Tax) Review, the Government proposed an increase in the rate of Superannuation Guarantee (SG) contributions and extension of the age at which Australians can be paid SG. Other key reforms include helping low income earners get more from super and giving older workers the chance to catch up their super contributions before retirement. These proposals, if they become law, are likely to have a really positive impact on members.

The table below briefly explains the proposed reforms and their potential impact on AustralianSuper members:

Cooper Review Detail of reformPotential impact on AustralianSuper members
MySuperMySuper is the proposed default low-cost fund for working Australians.There will be little change, as we already operate on a low-cost, no commission model and MySuper will replace our current default option.

The Federal Government announced that it intends to introduce MySuper from 1 July 2013.

SuperStreamSuperStream is aimed at increasing the back-office efficiency of the super industry and at eliminating manual, paper-based processing. For super members, this should mean lower fees and better service.AustralianSuper will pass on any cost savings resulting from SuperStream to members.
Managing the risks of super Other recommendations include requiring super funds to hold reserves to compensate members if the fund makes an operational
mistake, as well as new rules to strengthen the regulatory framework that governs the
super industry.		AustralianSuper already carries operational reserves for this purpose and we welcome any
move to improve the governance and protection
of members' retirement savings.
Henry ReviewDetail of reformPotential impact on AustralianSuper members
Increase in SG rate to 12%The Superannuation Guarantee (SG) rate is the minimum percentage of earnings that employers must contribute to super on behalf of their employees. From 1 July 2013 the current rate of 9% is set to rise gradually until it reaches 12% in 2020.This measure is expected to have a major impact on the retirement savings of most Australians. For example, a 30 year old earning the average full-time wage will have an additional $108,000 in retirement savings as a result of the increase in SG.
Increase in SG
age limit to 75		Currently an employer is only required to make SG payments on behalf of employees up to the age of 70. From 1 July 2013, this age limit will be increased to age 75.This ensures that no tax will be paid on superannuation guarantee contributions for those with incomes up to that amount in 2012-13. This will provide a real reward for saving to many low-income workers.
Helping older workers make catch-up contributions From 1 July 2012, the Government will allow workers aged 50 and over with balances below $500,000 to make up to $50,000 in concessional superannuation contributions.This doubles the cap of $25,000 which is scheduled to apply to these workers from 1 July 2012.