The performance panic-merchants have been squarely put in their place.
Far from obliterating our super funds, stratospheric growth in the share market (after an initial plummet) has turned the median fund return into an 18 per cent gain, from a 0.8 per cent loss in the 2019/20 financial year.
More astonishingly, the top fund increased 22 per cent in just the last year.
That’s for what’s called a balanced fund, which holds only 60-70 per cent in the growth assets (like shares and property) that have the potential to make the big money.
How has your super fund performed?
Did it shoot the lights out in these COVID-19 shutdown-afflicted times?
Read more from Nicole:
The top 10 super funds of 2020/2021
Members of the Qantas Super Gateway - Growth fund will be the happiest. They’ve made that 22 per cent, in just one year. That’s also pushed the fund to an 8.1 per cent average annual return over 10 years.
But three further funds have delighted their members.
The BT Panorama Full Menu, HostPlus Balanced and Colonial First State Wholesale Personal Multi-Index Balanced funds all made 21.3/21.4 per cent over the year. HostPlus also came in with an equal-top 10-year return of 9.7 per cent.
Next came MLC MasterKey’s Business Super at 20.8 per cent, Sunsuper For Life, at 20.7 per cent AustralianSuper, 20.4 per cent and – rounding out the 20-per cent club – REI Super, 20 per cent.
But that’s not the end of the honour roll with TelstraSuper, Suncorp Brighter Super Business, Cbus - Growth, Plum - Pre-mixed Moderate, Vision SS - Balanced Growth, HESTA Balanced Growth and TWU Super all banking over 19 per cent.
Ironically, unexpectedly, it’s been a tremendous year for the growth of your retirement funds.
Here is the full list of the top 20 super funds for 2021.
But what if your super fund hasn’t made that much?
There are just a couple of simple tests to make sure your super fund is the best way to secure your best life once you give up the nine-to-five grind.
Your fast super health check
Forget the stunning 18 percent median return this year – it’s year-after-year performance numbers that count.
SuperRatings, the superannuation data house that has provided all these performance figures, says that over 10 years the annual return you want is actually 8.2 per cent. So yes, despite the COVID-19 economy and one challenging year for super (2019/20), some funds have held up longer term annualised returns remarkably.
The Top 10 over ‘10’ is: AustralianSuper - Balanced, HostPlus - Balanced, Cbus - Growth, UniSuper Accumulation - Balanced, CareSuper - Balanced, Sunsuper for Life - Balanced, VicSuper FutureSaver - Growth, Vision SS - Balanced Growth, Aware Super - Growth and Equip MyFuture - Balanced Growth.
Then you want to check the average annual fee.
Here, your benchmark is a total $564 a year for a balance of $50,000. Of course, this goes up based on that balance.
Your next super safety check is how many funds do you have. From 1st November this year, it will be much more difficult to open a duplicate super fund – your fund will be ‘stapled’ to you and move with you when you change jobs. But the legacy of you having different jobs (and different houses) before this date remains.
Indeed, you may well have multiple funds, so be paying multiple fees and insurance premiums. All of which erode how much money you’ll end up with at retirement.
From September 1, you will be able to compare the performance of simple super products using the ATO comparison tool.
If you log onto your government myGov account, you will also be able to see your own funds against these alternatives.
You can also use the YourSuper tool which already includes links to easily consolidate your funds. Just pick the fund you want to pay any others into, a process for which the above lists may help.
Then, finally, you need to know how to claim the super freebies.
How to work the super system to boost your balance
With the co-contribution, if you pay in an after-tax $1000 every year, you can get up to $500 free from the government if you earn less than $56,112 (but above zero).
If one spouse is not working, however, if the other pays in $3,000 after tax for them, they will get up to a $540 tax offset. This opportunity is available on incomes for the lower-earning spouse of up to $40,000.
A quick super check could, without overstating it, net you another $100,000 in retirement.