Super funds deliver record annual returns

Australian superannuation funds have delivered exceptional benefits to members in FY2021, delivering average annual returns of nearly 20 per cent, according to the Association of Superannuation Funds of Australia (ASFA).

“We would normally expect super funds to report annual returns in the order of 6, 7 or 8 per cent. Clearly this is a remarkable result – the system’s strongest performance in the nearly thirty years since compulsory superannuation began,” said ASFA CEO, Dr Martin Fahy.

Average balanced super funds have delivered around 9% per year for the five year returns and around 8.5% for the ten year average return.

Of the around $800 billion in MySuper funds on average during the year, this equates to $160 billion in FY2021 investment returns. In the same period, fees on MySuper accounts totaled around $7.5 billion. Returns were over 21 times the total amount of fees paid.

A considerable number of super fund members in the retirement phase are likely to have investment returns of over 20 per cent in the financial year given that investment returns in retirement phase are tax free.

The Government’s 2021 Intergenerational Report (IGR) highlights the increasingly important role of Australia’s superannuation system in supporting the living standards of future generations of retirees.

The report highlights that with the Superannuation Guarantee (SG) going to 12 per cent, and more workers contributing to super for longer, the median superannuation balance at retirement will increase from around $125,000 at present to over $460,000 by 2060.

Superannuation will therefore continue to support millions of Australians in their retirement as well as support the broader national economy. The economic crisis brought about by the COVID-19 pandemic demonstrated the importance of the superannuation industry as it helped to recapitalise business, provided much needed liquidity and lend directly to business.

“Superannuation underpins the success of our economy. Superannuation funds invest in assets that not only provide high, long-term returns, but are also sustainable and contribute to the communities where members live, work and retire. This includes investments in public transport, affordable housing facilities and hospitals,” Dr Fahy concluded.

For further information, please contact:

Jacqui Maddock, 0451 949 300.

About ASFA

ASFA is the peak policy, research and advocacy body for Australia’s superannuation industry. It is a not-for-profit, sector-neutral, and non-party political, national organisation. ASFA’s mission is to continuously improve the superannuation system, so all Australians can enjoy a comfortable and dignified retirement.