Pension fund of the year 2024: What makes a winner?

Since the introduction of compulsory super in 1992,  the focus of our superannuation system – from the media, government, regulators and super funds themselves – has been on the accumulation phase.

There is applause and awards for the funds that deliver the best returns for members as if it’s a race past the post; the post being the day you retire and count your winnings. But that’s just the beginning.

While building your nest egg is important, the real challenge begins once you start drawing on it to pay for your living expenses in retirement. You want your money to last the distance and be invested in a way that gives you peace of mind.

That’s why your choice of pension fund is so important; because there are real differences in the strategies, products and services on offer.

What makes a winning pension fund?

The theme of Chant West’s 2024 super fund awards was ‘retirement takes centre stage’, in recognition of the need for more awareness and action on the retirement phase of super.

Chant West general manager, Ian Fryer said “the primary objective of superannuation is to provide Australians with an income in retirement, however, as an industry, we’ve typically been more focused on the accumulation phase.

“With the growing wave of retirees, regulator focus on retirement and the Retirement Income Covenant obligations in force, retirement issues have recently been placed under the spotlight – and rightly so.

“This year’s awards showcase those funds that are focused on preparing members for retirement and helping them get the most out of their retirement savings.”

Pension funds of the year

SuperRatings was first cab off the rank with its 2024 awards night held on 25 October 2023, while Chant West announced its 2024 winner on 22 May 2024.

Aware Super received top honours from both Chant West and SuperRatings after making its first appearance on the winner’s podium when it won SuperRatings’ retirement offering award. Aware Super edged out a crowded field of the usual suspects, including Australian Retirement Trust (ART), UniSuper (which won the SuperRatings overall Fund of the Year) and TelstraSuper (which won Chant West’s innovation award).

In a rare accolade, Aware Super also won Chant West’s Super Fund of the Year, as well as its Investments and Insurance awards.

Fryer says Aware Super took the decision around 15 months ago to bring its fund administration in-house, giving it more freedom and flexibility to innovate and tailor services to its members.

Fryer highlighted Aware Super’s strong advice services, especially for members approaching, or in, retirement. With its team of in-house advisers, it helps members work out what they should do and implement it – at no extra cost – as well as offering comprehensive advice. It also has different defensive options for pensions with exposure to liquid alternatives and defensive equities to provide smoother returns.

SuperRatings executive director Kirby Rappell says Aware has worked hard on its retirement offerings. It has launched an innovative retirement income calculator, making it one of only a few funds to give projections for every member and pathways to achieve their goals. It has also developed investment overlays for all its pension options to safeguard returns in volatile market conditions.

The table below lists the best pension funds for the past seven years as awarded by Chant West and SuperRatings. As you can see, the pension fund plaudits over the past seven years have gone mostly to industry funds, with the exception of corporate fund TelstraSuper. TelstraSuper has won plaudits for its strong focus on its pension fund members who represent a quarter of the fund’s assets.

Apart from Aware Super and TelstraSuper before it, two funds – UniSuper and Australian Retirement Trust (ART) QSuper – have been out and out champions in the pension space. (QSuper and Sunsuper, also a previous winner, merged to form the Australian Retirement Trust.)

Year	Chant West	SuperRatings
2024	Aware Super	Aware Super
2023	TelstraSuper	TelstraSuper
2022	TelstraSuper	QSuper*
2021	UniSuper	QSuper*
2020	QSuper*	QSuper*
2019	QSuper*	QSuper*
2018	UniSuper	Sunsuper*
2017	UniSuper	UniSuper

Sources: Chant West and SuperRatings

*now part of Australian Retirement Trust

Prior to the 2024 awards, QSuper had won the top award six times. Rappell says innovation in the pension space has been disappointing overall given the large numbers of members entering retirement phase.

QSuper’s trailblazing lifetime pension allows members to take out the same amount of money each year until they die, so they can be confident that their money won’t run out. Another advantage is that only 60% of the money in a lifetime pension account is counted towards the Age Pension assets test, unlike other pension accounts where 100% of your balance is assessed.

QSuper’s annuity-like lifetime pension is an example of the concept of income layering in retirement. The idea is you put part of your retirement balance in a product like the lifetime pension to be used for essential spending but not your entire balance. You then use other pension accounts exposed to markets and potential capital growth for discretionary spending.  

UniSuper’s pension product is very strong on both investments and advice. Fryer says its long-standing focus on listed assets is now supported by meaningful allocations of unlisted assets that will help smooth the ride for pension members.

However, more funds are beginning to offer annuity-like pension products designed to provide income for life and peace of mind for people who are worried about outliving their savings.

ChantWest’s lifetime product award went to AMP MyNorth Lifetime which Fryer describes as the most sophisticated of the current offerings.

Industry behemoth AustralianSuper plans to launch its lifetime product early in 2025 and more are set to follow.

The bottom line

Choosing a pension fund that offers the best retirement outcome for your personal circumstances and preferences is every bit as important as choosing the right super fund; perhaps more so.

The annual pension fund awards are a great way to check what the best funds are doing right at a particular point in time, but your search shouldn’t end there. Over the next few years, more funds are expected to launch innovative pension products that reduce the risk of outliving your savings, or provide more flexibility around how you withdraw income, so when retirement beckons it’s important to compare pension funds.