Super:how it stacks up now

Thousands of Australians, close to retirement, were devastated last year when they looked at their prospective superannuation payouts.

They were shocked to find that they would be getting much less than they expected.

This was one of the hardest blows delivered by the stock market crash.

Australia’s superannuation funds also suffered, as these events badly damaged their credibility.

What, though, has happened since then?

And how does superannuation stack up now, as a medium to long term investment?

Jeff Bresnahan – and his research team at Superratings – have been taking a very close look at these issues.

The results are published on its website www.superratings.com.au.

It’s well worth taking a look.

The situation now is well illustrated in the title of this research agency’s latest report, called The hit and miss game of super performance.

As might be expected, in times like these, the short term performance of Australia’s major superannuation funds is not impressive.

In January, for example, they slipped backwards by 2.17 per cent.

In the 12 months to January31, though, they gained 12.66 per cent.

That gain, of course, was from a post-crash position that no-one likes to think about now.

The mid to longer term results though are more interesting.

On a rolling 5 year basis, to the end of January, the same funds were chalking up average advances of 4.3 per cent a year.

And on rolling 7 year calculations that result rises to 6.7 per cent a year.

As Mr Bresnahan, himself, says that last result, in particular, represents real gains in wealth, after allowing for inflation.

The essential message here, perhaps, is that superannuation is a mid to long term investment, for most people.

So, perhaps, that is the way it is best assessed – despite all the – mostly true – horror stories of the past year or so.