2 September 2022
Net benefit is the number that really matters when it comes to assessing how your fund is performing. Strong long-term returns and a growing balance are important – but it’s net benefit that shows the true value of your fund.
Your super fund’s main job is to contribute to the growth of your retirement savings by delivering you returns on the money you put into your super. You do your bit – your money goes in, and a good fund does its bit – investing that money with skill and focus. The combined result should be a growing balance over the course of your working life and in retirement.
That’s the investment part. Then there’s the fees – what your super fund charges to manage and invest your money.
Industry Super Funds are run for members’ benefit. Retail funds often charge higher fees as they have a responsibility to their shareholders and a focus on profit.
What is net benefit and how is it calculated?
In relation to your super, net benefit is: the investment return delivered to you by your super fund minus the administration fees, investment fees and costs and taxes.
When you’re comparing the performance of super funds or checking that your fund is delivering on your investments, it’s the net benefit that really matters.
To calculate your net benefit you need to know your investment earnings for the year and the fees you paid for the year. For AustralianSuper members, the tables below give the net benefit over 5, 10 and 15 years.
Investment returns to members are most important
A report on superannuation, published by the Productivity Commission in December 2018, said that delivering investment returns to members (net of all fees and taxes) is the most important way super can help people achieve a good retirement income.
And a difference of 1% in returns, over the long term, can have a huge impact on your final balance. For example, the difference between a 5 and 6% return from your fund, can amount to a projected 23% ($255,000) difference in retirement balances for a typical full-time worker.1
FIND OUT MORE: AUSTRALIANSUPER’S PERFORMANCE
How well does AustralianSuper perform when it comes to net benefit?
Pre-retirement - building your super
The following table compares AustralianSuper’s Balanced Option net benefit against the average of all super funds and bank-owned retail funds. This shows investment earnings to 30 June 2022, less administration and investment fees and costs, and it’s one of the best ways to see how funds compare.
Net Benefit - Super
| net benefit over 5 yrs | net benefit over 10 yrs | Net benefit Over 15 yrs | |
|---|---|---|---|
| AustralianSuper Balanced option | $23,636 | 91,376 | $128,125 |
| All super funds (average) |
$16,861 | $68,678 | $92,886 |
| Retail funds (average)
|
$13,985 | $57,950 | $67,343 |
In Retirement – Managing your pension
Even in retirement, our history of strong performance has given AustralianSuper members an advantage over the long term. The following table compares the performance of AustralianSuper’s account based pension - Choice Income - net benefit against others and shows how a member’s balance would have grown over 10 years to 30 June 2022, while still drawing a retirement income.
Net Benefit - Account based pension
| Starting balance | Yearly income payment over 10 yrs | Investment earnings (less fees and costs) over 10 yrs | Balance after 10 yrs | |
|---|---|---|---|---|
| AustralianSuper Choice Income – Balanced option | $300,000 | $23,716 | $379,809 | $442,651 |
| All super funds (average) |
$300,000 |
$21,868 |
$289,560 |
$370,877
|
| Retail funds (average)
|
$300,000 | $21,036 | $245,804 | $335,449
|
Compare your super fund with AustralianSuper
Comparing super funds and account -based pension products such as Choice Income is an important step in managing your super. Independent superannuation and pension research group Chant West have a comparison tool you can use for free via the AustralianSuper website.
You can compare AustralianSuper with other funds on an ‘apples-to-apples’ basis that covers investments, fees, insurance and member services.
References
1. Productivity commission - pc.gov.au/inquiries/completed/superannuation
2. Comparisons modelled by SuperRatings, commissioned by AustralianSuper. The outcome shows the average difference in ‘net benefit’, a measure of past investment earnings after administration fees, investment fees and costs and taxes have been taken out. The results compare the AustralianSuper Balanced investment option and comparable balanced options, for historical periods to 30 June 2022. Insurance premiums and other fees and costs may also apply. Outcomes vary between individual funds. See Assumptions for more details. Investment returns are not guaranteed. Past performance is not a reliable indicator of future returns. AustralianSuper returns before 1 July 2006 are calculated from equivalent options of the ARF and STA super funds. Please note, the administration fees charged to members changed on 1 September 2022 for Pension products and 3 September 2022 for Accumulation products. Please refer to the product disclosure statements for updated information at www.australiansuper.com/pds
3. Comparisons are modelled by SuperRatings, commissioned by AustralianSuper. The model uses return and fee data that is submitted to SuperRatings. The model assumes: a starting age of 65 commencing 1 July 2012 and finishing on 30 June 2022; a starting balance of $300,000; and a drawdown rate of 6% p.a. Insurance premiums and other fees and costs may apply. Outcomes vary between individual funds. Figures have been rounded to the nearest $100. See Assumptions for more details about modelling calculations and assumptions. Investment returns are not guaranteed. Past performance is not a reliable indicator of future returns.
This may include general financial advice which doesn’t take into account your personal objectives, financial situation or needs. Before making a decision consider if the information is right for you and read the relevant Product Disclosure Statement, available at australiansuper.com/pds or by calling 1300 300 273. A Target Market Determination (TMD) is a document that outlines the target market a product has been designed for. Find the TMDs at australiansuper.com/TMD.
AustralianSuper Pty Ltd ABN 94 006 457 987, AFSL 233788, Trustee of AustralianSuper ABN 65 714 394 898.