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Goldies, CBA super funds outshine rivals

Bankers have put their financial skills to good use when saving for their retirement, producing the top two performing superannuation funds over the past decade.

The Goldman Sachs & JBWere and Commonwealth Bank staff super schemes outshone the rest of the super universe in the 10 years to June 2013, returning on average 10.5 per cent and 8.1 per cent respectively each year, figures from the prudential regulator show.

The next best-performing funds were UniSuper, an industry fund for employees in the tertiary education sector, and the Worsley corporate scheme, which both added 8 per cent annually over the past decade.

Australian Prudential Regulation Authority figures show Australian superannuation funds recorded their best performance in seven years as the total worth of the nation's pool grew to $1.62 trillion.

The industry-wide rate of return for superannuation funds in the year to June 30, 2013, was 13.7 per cent – the best result since 2007, before the global financial crisis and well ahead of the 10-year average of 6 per cent.

Overall, industry, corporate and public sector funds dominated the top of the APRA league table, which is controversial because it takes into account the whole of a super fund's performance, rather than comparing individual investment options.


As a result, super funds with a high proportion of older members, whose savings are invested in cash and other defensive asset classes, are likely to show relatively poor returns.

The APRA figures show a wide disparity in the performance of the biggest funds.

The largest scheme, the $66 billion AustralianSuper fund, posted a 7.2 per cent annual return over 10 years. Fellow industry funds, HESTA and REST, also fared well. REST, which caters to employees in the retail industry, with $28 billion under management, returned 7.3 per cent annually, while HESTA, which specialises in health sector staffers, gained 7 per cent a year on average.

By contrast, the biggest retail funds – AMP, Colonial First State FirstChoice and OnePath, which is owned by ANZ  – all recorded annual returns of less than 5 per cent. MLC's Universal Super Scheme added 5.4 per cent a year.

On a one-year basis, industry superannuation funds recorded the largest growth in asset size, increasing by 21.5 per cent to $316.2 billion. Small funds, including self-managed superannuation funds (SMSFs), increased 15.5 per cent to be worth  $506 billion.

Retail super funds grew assets by 13.9 per cent to $421.7 billion.

On a one-year basis, industry funds also showed the strongest rate of return for members, recording 14.4 per cent for the 2013 financial year, followed by public sector funds on 14.2 per cent, retail funds on 13.1 per cent and corporate funds on 12.3 per cent. SMSFs now account for 31 per cent of Australia's super assets – the largest of any sector.

Despite the controversy over the nature of the figures, the discrepancy in performance between retail and industry funds is likely to intensify debate about governance. Industry funds argue their sound investment performance shows their board structure is optimal, while critics say they should appoint more independent directors.