27 May 2020
Dear AustralianSuper Member
I hope you’re coping well in these extraordinary times. I’d like to update you on how AustralianSuper is managing your superannuation savings during the COVID-19 pandemic period.
Governments have begun the task of easing restrictions related to COVID-19, and the widespread employment-related effects of the virus are becoming clear. April employment data from the ABS was devastating - 600,000 people lost their jobs and 1 million workers had their hours cut.
AustralianSuper has more than 2 million members, and I know many of you will be amongst those who’ve lost their jobs or had hours and income cut. And for those who aren’t directly impacted, we all have family and friends who are.
Australia has, to date, very successfully managed the health effects of the virus, but the economic effects present huge challenges.
At AustralianSuper our focus remains on being the most effective manager of your retirement savings. I want to assure members that the AustralianSuper investment team is working hard to manage your super. The customer team are also here, to offer guidance and assistance where we can and support any members who have applied for temporary early access to super, as a result of financial hardship caused by the effects of COVID-19.
In periods of economic uncertainty investment markets become more volatile – with larger and more frequent positive and negative swings in performance.
In April we saw the Balanced option benefit from a huge rebound in share markets – the US share market had the largest monthly increase in 33 years. The investment performance of the Balanced option for the financial year to the end of April was negative 3.3%. While history tells us we can expect a negative annual return about once in every 4 to 5 years, this financial year is likely to be the first negative return for the Balanced option in the last 11 years - since the Global Financial Crisis period.
Over the past 10 years to 30 April 2020, the Balanced option has returned an average of 8.0% per annum1 – a cumulative return of 116% over that time – and remained the top performing fund over 5, 10 and 15 years2. These figures reflect the benefits of the Balanced option’s diversification and the careful work of the AustralianSuper investment team, who have constructed a resilient portfolio for members
During May we continued to see fluctuations in markets. We expect this volatility to continue for some months until there is greater certainty around the pathway to recovery.
When markets are moving around like this it highlights the potential dangers of making investment decisions based on what is happening in the short-term. It’s incredibly hard to time the market and our research shows that over the long term, many members who have stayed invested during the ups and downs are better off than those who switched investment options to try and avoid negative market events. The problems of trying to time the market have also been revealed in ASIC's recent report - Retail investor trading during COVID-19 volatility.
In the current climate it can be hard think beyond a few weeks or months, but it’s important to have a long-term focus when it comes to your super as it’s likely to be invested for many more years, even for those who are already in retirement.3
Temporary early access update
Over 200,000 AustralianSuper members have withdrawn some of their super through the government’s Temporary Early Access to super arrangement. The Fund has been able to process almost 97% of payments within 5 business days once we receive notification from the ATO. I know for many, this money is life changing and whilst a small minority of payments are taking longer than 5 days please know that this is so we can undertake appropriate security checks. It’s important we do this to reduce the risk of members having their super savings stolen by scammers.
Support, help and guidance for members
The current uncertainty continues to prompt record numbers of members to contact us by phone, email, social media, chat and the AustralianSuper app. I understand delays are very frustrating and apologise if we’ve not been able to deliver the level of service we normally do. We have re-assigned more people from across the business to answer your calls and emails, in a bid to cut down your waiting time.
In addition to increasing the number of staff responding to inquiries, we continue to update our website, in particular our COVID-19 page as well as a wide range of articles, videos and webinars, fact sheets and tools.
The AustralianSuper app provides members with easy access to their account.
For those of you starting to plan for retirement our education team have developed a range of information, tips, tools and ways to get the advice you need.
None of us know what the COVID-19 future holds. However, I do assure you that the team at AustralianSuper remains 100% focused on ensuring your super savings are well managed now, and in the long run.
1. Investment returns are not guaranteed. Past
performance is not a reliable indicator of future returns
2. SuperRatings Fund Crediting Rate Survey - SR50 Balanced (60-76) Index, 30 April 2020.
3. Before making investment decisions, members should consider their financial requirements and their personal objectives, situation or needs.