POWERED BY MOMENTUM MEDIA
Adviser identifies dodgy super fund outcomes assessments
Amid the Federal Government’s release of the regulatory underpinnings of its controversial Your Future, Your Super legislation, a South Australian academic researcher and qualified financial planner has raised serious questions about the validity of the member “outcomes assessments” being published by superannuation funds.
Mark Bastiaans, a masters research candidate at the University of South Australia, has undertaken research which concludes that the MySuper Dashboard ‘representative member’ investment return used by many superannuation funds “does not in fact accurately ‘represent’ what individual members actually earn”.
“In fact, the representation is highly inaccurate,” he claims.
“The reason why members will experience different outcomes is due to individuals account characteristics, in particular their account balance, presence, and timing of transactions and the impact different fee structures used by super funds (flat dollar and percentage based),” he wrote.
Bastiaans said his findings were based on a study that used de-identified confidential member level data (consisting of transaction dates and categorised amounts) and Microsoft Excel’s ‘eXtended Internal Rate of Return’ (XIRR) formula to calculate a money-weighted personal rate of return for 53,770 members invested exclusively in the MySuper product of a single Registrable Superannuation Entity (RSE) between 1 July 2018 and 30 June 2019.
Bastiaans’ findings revealed the range of investment returns was 98.06% (minimum -63.90% and maximum of +34.16%).
“Using the MySuper Dashboard ‘representative member’ investment return of 7.05% as a benchmark, 84.2% of the study sample received a personal rate of return below the MySuper Dashboard investment return,” he wrote.
“The evidence from the study points to the fact that the MySuper Dashboard ‘representative member’ investment return does not in fact accurately ‘represent’ what individual members actually earn.”
“Those at the lower end of account balance earn significantly less than the ‘representative member’. Within this cohort are the young, paying insurance premiums, and those in regional and remote locations,” Bastiaans wrote.
Recommended for you
Aware Super has made a $1.6 billion investment in a 99-hectare industrial precinct in Melbourne’s North which, the fund clarified, also houses the nation’s first privately funded open-access intermodal freight terminal.
ASFA has affirmed its commitment to safeguarding Australia’s retirement savings as cyber activity becomes an increasing challenge for the financial services sector.
The shadow treasurer is not happy with the performance of some within the super sector, telling an event in Sydney on Thursday that some funds are obsessed with funds under management, above all else.
As the Australian financial landscape faces increasing scrutiny from regulators, superannuation fund leaders are doubling down on their support for private markets, arguing these investments are not just necessary but critical for long-term financial stability.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
GAM LSA Private Shares AU I
37.08 3 y p.a(%)
2
DomaCom Lot 21 Chellaston Road Munno Para West SA 5115 Australia
32.63 3 y p.a(%)
3
Fidante Credit Suisse Global Private Equity
31.12 3 y p.a(%)
4
Global X GlobalX FANG+ ETF
28.28 3 y p.a(%)
5
Plato Global Alpha A
27.76 3 y p.a(%)
The problem with averages, like a good suit, they hide a thousand sins.