Note: Every year we update this article with the latest data released by the Australian Prudential Regulation Authority (APRA) on the performance of Australia’s largest 200 super funds. This article contains the fund performance data for the year ended 30 June 2010 (the latest data available as at March 2011). APRA will release the next report ( for year ended 30 June 2011) in the first quarter of 2012.
The Australian Prudential Regulation Authority (APRA) has released its latest report on the performance of Australia’s largest 200 superannuation funds for the years 2004 to 2010. The report also provides average returns for the 200 super funds over a 5-year period and 7-year period.
Despite vocal opposition from some sections of the superannuation industry, APRA continues to release this performance data. Although the APRA report (Superannuation Fund-level Rates of Return June 2010 – issued 27 January 2011) has its weaknesses when trying to compare individual fund performance, the report still provides some fascinating reading when analysing general trends in
Sharp drop in long-term returns due to GFC
Before the
In contrast, for the five-year period up to 30 June 2010 (financial years 2006 to 2010), not one of the 200 superannuation funds listed in report delivered a return of 9% or above. The highest fund-level rate of return over a 5-year period was an average of 8.1% per year (Goldman Sachs & Partners Australia Superannuation Fund, for employees of Goldman Sachs), followed by one fund delivering 5.9% per year (Officers’ Superannuation Fund, for employees of Commonwealth Bank), and two funds delivering 5.4% per year on average (Shell Australia Superannuation Fund, for employees of Shell, and Worsley Alumina Superannuation Fund, for employees of the company).
According to the APRA report, the top 4 super fund performers over the 5-year period from 2006 to 2010, were corporate superannuation funds, that is, super funds set up by companies to look after the superannuation needs of employees.
Note: The data covers the 200 largest super funds in Australia which represents 98% of the assets of all super funds regulated by APRA, and 95% of all fund members. Although not included in the data, APRA-regulated super funds also include small APRA funds (four members or less), exempt public sector superannuation schemes and pooled superannuation trusts. Note that self-managed super funds, which hold more than 30% of all super assets and are regulated by the ATO, are not included in the APRA report.
Weaknesses of APRA performance data
Industry association, the Association of Superannuation Funds of Australia (ASFA) has warned consumers that the APRA performance data will be of limited assistance when checking the relative performance of superannuation funds.
ASFA CEO, Pauline Vamos, has publicly stated that she holds the view that the super funds at the top of the APRA returns list (for the first APRA report) had relatively few investment options and most money was invested in the default option. Accordingly, ASFA accepts that the APRA return figure for these funds is in line with the return of their default, balanced fund, investment option. In contrast, ASFA has asserted that with the more complex funds with multiple products and investment options – such as
The inference to be taken from these observations is that the APRA report is suitable when comparing default investment options where the super fund, typically, a
Even so, the point that ASFA makes is valid when trying to compare your super fund’s
ASFA, along with the private fund rating agencies, consider that the rating agencies provide more detailed and more current investment performance information to the media and the public than the APRA performance data.
The following are the two major complaints directed towards the APRA performance data:
- returns quoted in the APRA report are for the total assets of a super fund, rather than for the different investment options within the fund
- reported returns in APRA report only represent investment performance up to 30 June 2010, which means up to nine months have passed before the APRA data is publicly available (the report is released in the first quarter of the following calendar year).
According to APRA, the performance data is sourced from annual audited returns submitted by the funds’ trustees. APRA does not currently collect investment option data from super funds, although the regulator is investigating broadening its collection of statistics from super funds.
You can access the APRA performance report listing the returns for Australia’s largest 200 super funds by clicking here.
See also
- Which super funds have the largest asset allocation to the property sector?
- Ten handy uses for the APRA200 performance list
- Investment performance: We’re the best super fund. No, we’re the best…
- Investment performance: Benchmarking super fund returns
- Super for beginners, part 20: Comparing your super fund’s performance
On this first brief glance through this material it looks good!