Jeff Bresnahan, of SuperRatings, which produced the research, said  had  seen REST “outperform all competing public offer funds” over that period.

The Retail Employees Superannuation Trust, REST, finished in fine style, producing an 11.4 per cent return for 2009-10.

The fund, which anyone can join, has 1.8 million lucky members.

The share market crash, which precipitated the global economic crisis, has been a nightmare for Australia’s superannuation funds, which invest heavily in global share markets.

The industry, overall, manages some $1.2 trillion.

This is one of the biggest pools of money, anywhere in the world.

However  the industry’s long awaited recovery is under way – and Mr Bresnahan said that, as recently as March average returns close to 15 per cent, had appeared likely for 2009-10.

But a faltering share market – and  fees – had worked together to reduce that average to just 9.8 per cent.

The agency studied balanced fund options.

Mr Bresnahan said that while the latest result might not “look great on paper, in a relative sense balanced options had done what they set out to do.”

They had prevented significant losses, through diversification.”

Mr Bresnahan warned, though, that Australia’s superannuation industry is still not over the shocks produced by the global financial crisis.

“Long term figures for super fund returns are now starting to feel the pain of the prolonged global financial crisis, with the 10 year result falling to 4.5 per cent per annum,” Mr Bresnahan said.

His agency’s research also revealed some of the pain the industry has been experiencing, in the wake of the crisis.

He said personal contributions to Australia’s  super funds  had fallen by “more than 50 per cent”  while new memberships and transfers between funds had been running “significantly lower” than ever before.

The Federal government is now being urged to follow and develop that example for all Australian superannuation fund members.

That advice is contained in the third major report produced by the Cooper commission which has been reviewing Australia’s superannuation system, in depth.

The Federal government has welcomed the report, which basically urges that superannuation should be more member focused and less industry focused.

The Minister for Financial Services, Superannuation and Corporate Law,  Chris Bowen, said:”Every dollar we save in unnecessary fees and costs will help Australians’ retirement savings go further.”

There is a great deal at stake.

Australians now have an estimated $1.3 trillion invested in their superannuation.  Some experts say that this is the fourth biggest pool of money in the world.

However the report, warns that $13.6 billion of that money is in lost accounts.  Its owners cannot be found.

The report sharply criticises what it calls the “back office” operations of Australia’s superannuation funds, saying too much money is being wasted on inefficient paper based transactions.

The latest report recommends  simple, default funds, to be called MySuper, which would operate without contribution fees or commissions at all – and more efficiently run  Superstream funds.  It says that, taken together,  these measures,  could offer cost savings of $2.7 billion a year.
Mr Bowen said they could add $40,000 to the retirement savings of a worker on average weekly earnings.

Australia’s superannuation industry welcomed much of the latest report, which makes 177 recommendations in all.

Its leaders said, the industry had already been moving in the broad directions, identified by the report, over recent years.

However, there was one major exception.

John Brogden, of the Investment and Financial Services Association sharply criticised the review’s MySuper recommendations.

“MySuper legislates disinterest and apathy,” he said.

It “dumbs down super.”

“MySuper swings the simplification pendulum too far,” Mr Brogden added.

Mr Bowen said the government would consult with all interested parties before announcing its decisions.

But – although lower than they have been – those returns are still strong.

And one expert is warning that people with self managed superannuation funds should resist the present temptation to panic.

Jeff Bresnahan of SuperRatings says Australia’s major superannuation funds are now looking at an estimated 9.6 per cent return over the financial year, which has just ended.

That’s down from the 15 per cent returns that were chalked up, in the 12 months to the end of April.

Mr Bresnahan said though that even the latest figure should be regarded as “strong.”

He said it represents a real return of almost 7 per cent, once the current rate of inflation is taken into account.

Mr  Bresnahan said he hopes this will help restore public confidence in the superannuation system.

That was damaged by the share market crash produced by the global financial crisis.

He warned against making short term assessment of  investments in superannuation.

Mr Bresnahan said short to medium term superannuation funds now look “quite sick” when assessed against their objectives.

However long term superannuation funds are still “quite strong.”

“Hence we are still strong believers in the set and forget investment strategies,” Mr Bresnahan said.

“In fact it would be good if most people with super, particularly those under 50 years of age, could simply stick their heads in the sand and pull them out about five years away from retirement.” he added.

Mr Bresnahan admitted that people get scared, when share markets fall.

And that could cause them to make changes at “precisely the wrong time,” he said.

SuperRatings also estimated that Australia’s superannuation funds had recorded average earnings of 3.7 per cent a year over the past five years.

However average returns, since the introduction of compulsory superannuation, had been a much healthier 6.8 per cent a year, before inflation, which had averaged 2.6 per cent a year, over that time.

In a major development yesterday, the Superannuation Industry Review handed its third and final report to the Federal government.

This report deals, in part, with the fees charged by Australia’s superannuation funds.  It is expected to lead to simpler superannuation accounts, with much lower fees.

The Federal Superannuation Minister, Chris Bowen, said the reforms which would flow from this report, which has not yet been made public, would complete the overhaul of Australia’s superannuation industry.

He promised to release the report “quite soon.”

The Federal government has also announced that it will extend drawdown relief, for account based pensions, into the new financial year.

The industry welcomed this announcement, saying it would particularly help retirees with low balance accounts.

Pauline Vamos, of the Australian Superanuation Funds Association said:”This is an important initiative as there is still ongoing volatility in investment markets.

“Fund members need more time to allow their account balances to recover,” Ms Vamos said.

And this one has your name on it.

You might end up worse off in retirement than you should have been.

Or you could end up paying more tax.

There is still some doubt about how big this price tag will be.

The word substantial, though, would not be misplaced.

The government said, back in May, that it would gradually lift the compulsory superannuation contribution rate, from its present level of 9 per cent, to 12 per cent.

It also said, then, that it planned to gradually cut the company tax rate, for small business people, from 30 to 28 per cent.

However, the Treasurer, Wayne Swan, also issued a blunt warning at the time, about this package of measures, which also included a plan to making putting in your annual tax return much simpler.

As most Australians now employee an accountant, at a cost that commonly reaches $800 a year, that small change, too, offered substantial savings.

What, though, was Wayne’s warning?

In his own words, it was this:”…the package is dependent on the successful implementation of the Resource Super Profits Tax.”

As that has now been thrown into doubt, the 12 per cent superannuation levy and the cuts to company tax for small business have too.

The are the inevitable consequences of what Julia Gillard and her backers have done.

Ms Gillard says she expects Australia’s miners to pay more than they have been.

However, the 40 per cent super profits tax, which Kevin Rudd proposed, is effectively dead in the water.

One of the government’s chief negotiators, in present talks with the miners, Martin Ferguson, says more progress has been made than many observers recognise.

That might be true.  It is now clear, though, that the package of benefits, that the super profits tax was meant to fund, will now be cut back sharply.

So what does all that mean to you?

On the government’s own figures, if you are now a 30 year old employee, the loss of that 12 per cent compulsory super contribution would cost you no less than $108,000, on the day you retire, at 65.

That is a substantial amount, on any calculation.`

Chris Bowen, the minister who has responsibility for superannuation, revealed that in in a television interview.

He said the third report of the Super System Review will reach him on June 30.

That will deal with the structure of this huge industry, which now has $1.2 trillion under its control.

In a preliminary report, published in April, the head of the review, Mr Cooper, recommended that self managed superannuation funds not be allowed to invest in collectible items, like yachts, wine or exotic cars.

Mr Bowen said he would be responding to that final report, after he received it.

“Once that’s done, they’ll be, in total, by far the biggest reforms in superannuation that we’ve seen in 20 years,” he added.

However he also said:”It’s unlikely that we’re going to see legislation before the election.”

“This “underlines the importance of the re-election of the government,” Mr Bowen said.

No date has yet been set for the next Federal election.

The last Saturday on which it could be held, under existing law,  is February 5.

However, governments have traditionally been reluctant to hold elections during holiday periods, so it is still likely to be held this year.

The government is also  facing another obstacle to an early overhaul of Australia’s superannuation system.

It has announced that it intends to raise the present compulsory superannuation levy from 9 to 12 per cent of salary, saying this would add $108,000 to the eventual superannuation payout of a worker now aged 30.

However this declaration depends on acceptance of the resource industry super profits tax, which is still being negotiated with Australian miners.

The Opposition Leader, Tony Abbott, flatly opposes that tax.

The Coalition also opposes the government’s proposed move to a 12 per cent superannuation guarantee levy.

The Federal government acknowledged this yesterday, when a senior minister confirmed that the average superannuation payout for Australian women is still less than  half that of their male colleagues.

Chris Bowen, who is responsible for the government’s superannuation policy said research had shown that “the average payout for a woman on retirement was only $73,000 compared to $155,000 for men.”

” As a result of this difference, men hold about 60 per cent of superannuation balances while women hold over 30 per cent,” Mr Bowen added.

“There is no question that there are challenges confronting Australian women in building adequate retirement incomes,” he added

These include interrupted work patterns and time out of  work with family responsibilities.

Yet women, generally,  have long periods in retirement to finance.

“A report issued yesterday by the Melbourne Institute showed that women aged 55 to 59 are expected to live for 21 years in retirement,” Mr Bowen said.

Yet they would only have “adequate retirement incomes for two years.”

Mr Bowen said problems like this were driving the government’s proposed reforms to Australia’s superannuation system.

“That is exactly the reason for the government’s reforms to superannuation,” the minister said.

He said the government wants:”to bring in more fairness to the superannuation system in Australia.

“Our changes will result in increased retirement savings for 4.1 million women across the country, including 2.1 million women on lower incomes and 100,000 Australian women over 50 who will be able to access the improved concessions for top-up payments to superannuation,” Mr Bowen said.

He was speaking at question time in Federal parliament.

In a television interview later, the Prime Minister, Kevin Rudd, said 7.5 million Australian families would benefit from the superannuation reforms, that the Federal government has proposed.

However, the government plans to finance these – and other – reforms from the proceeds of  the super profits tax it has proposed for the mining industry.

And it does not have the numbers it would need in the Senate, to ensure passage of that tax, which the Coalition flatly opposes.

That could leave you a lot poorer in retirement.

Surveys have repeatedly shown that the public is heavily in favour of the government’s plan to raise the compulsory superannuation levy from its present level of 9 to 12 per cent.

However the government has been adamant that this won’t happen, unless its super profits tax is passed by parliament.

It does not have the numbers it would need in the Senate, to guarantee its plan safe passage through Federal parliament.

This situation affects you, directly.

The government’s best estimate that a typical worker, who is now 30, would be $108,000 better off in retirement, if its plan is accepted.

Superannuation would be improved in other ways, too.

People on low incomes could look forward to a government contribution to their super.

There would also be  concessional superannuation contribution caps, for people approaching retirement.

These benefits, too, depend on acceptance of the resource industry super profits tax.

The government is campaigning hard on these issues.

The Financial Services Minister, Chris Bowen, for example, is arguing that the government’s plan would be fairer than the present law, for Australia as a whole.

Tony Abbott, though, dismisses its plan as nothing more than “a great big new tax” on the mining industry.

The mining industry, led by Clive Palmer, among others, heartily endorses Abbott’s view.

It, too, is campaigning hard, to defeat the government’s plans.

With opinion polls now pointing consistently to a very close vote, in the Federal elections due later this year, the fate of the government’s plan is anything but clear.

What is clear, though, is that this debate affects more than just the politicians and the miners.

You have a clear interest in it, as well,  no matter who you may be.

So it’s time to weigh up the pros and the cons, as you see them.

And that could cost you quite a lot of money.

You can protect yourself against these potential losses.

But you must act now, to succeed.

Perhaps, though, we are getting a little ahead of ourselves here.

So let’s take a step or two back, so that we can see the danger.

As you would know, the government is presently involved in a big row with the nation’s miners, over its plans to introduce a super profits tax in the mining industry.

And, whether you like it or not, that will affect you, directly.

The Prime Minister is planning to use the revenue he raises in that way, for several purposes.

These include gradually reducing Australia’s company tax rate from its present 30 per cent to just 28 per cent.

The so-called super  profits tax would also be used to help  gradually raise the present compulsory superannuation levy from 9 to 12 per cent of wages.

The government estimates that  this will put an extra $108,000 into the ultimate superannuation payout of a worker now aged 30.

However it also warns that the higher levy won’t proceed, if the super profits tax is killed.

That could happen.

The government does not have the numbers it would need in the Senate, to guarantee that the proposed measures will become law.

The opposition has declared that it will oppose the new tax.

So that higher levy is very much at risk.

So, too, is that extra $100,000 or so, that you might have expected, on retirement, if you are 30 now.

The miners’  campaign against the government’s plan was entirely predictable.

Kevin Rudd should have seen it coming.

He should have recognised, also, that the government’s position was weak, because it will  be facing a Federal election, very soon.

That is the raw political reality.

Mr Rudd should have seen ithe present trouble coming.  In better times, he probably would have.

But fighting the effects of a global economic crisis can be exhausting.

What, though, can you do to protect yourself, financially, in a situation like this?

Typing out a short note to your pay office, or accountant, perhaps might be a worthwhile step.

Tell the appropriate person that you want to increase your superannuation contributions from the present 9 per cent of your income, to 12 per cent.

Think seriously, too, about putting those payments into a self managed superannuation fund.

That way, you can  also protect yourself against  the expensive effects of stock market crashes later
in your working life.

A self managed fund has other advantages, too.  It can free you from expensive fees, that can also reduce your ultimate payout, when you hit your sixties.

Politicians come and go.  So do their policies and tricks.  Self reliance, though, certainly has its  value, in matters like these.

The Treasurer is not bothering to hide that fact even though the board will, of course,  act independently, as usual.

In his weekly economic note, Mr Swan noted that the International Monetary Fund, itself, now believes that:”Premature exit from from accommodative monetary and fiscal policies seems a significant risk…” to the still troubled global economic recovery.

Just in case that might not be a big enough hint for the Reserve Bank Governor, Glenn Stevens, Mr Swan also took the precaution of  quoting Mr Stevens, himself, as well.

The Treasurer reminded Mr Stevens of the words the bank chief. himself, had used a few days ago, when he appeared before the Senate Economics Committee in Canberra.

Under questioning then, Mr Stevens had said:”I think it’s a bit hard to claim as of this moment that that there is too much growth in the economy.”

Hardly the time then, eh Glenn, to be raising interest rates again, as you have been so fond of doing over the past several months?

Is it?

Although Mr Swan didn’t use those last two sentences, exactly, he might as well have done, for all practical purposes.

There was, in fact, no way that the Reserve Bank board could miss the none- too- subtle message that the Treasurer was sending.

Whatever happens on rates,  though, this will be a big week.

Federal Parliament will be back – and the government is still at loggerheads with the mining industry over the  proposed resources super profits tax.

That has just become more personal, with a senior Labor Minister, Craig Emerson, calling reporters together to explain the substantial  Clive Palmer’s substantial links with the Liberal and  National Parties.

Meanwhile, the heavy advertising campaigns, that both sides are mounting in newspapers and television, are delighting Australia’s media barons.

They have had little else to cheer them, over recent years, as they watched their old rivers of gold drying up,  before the rapid advance of new media like the internet, which they don’t control.

New figures this week will also throw more light on Australia’s balance of payments, its retail trade, building approvals and national income.

Federal parliament is also due to debate Australia’s tax laws, superannuation reforms and the Rudd government’s relatively modest paid parental scheme proposals, this week.
Investor’s attention, though, will still be firmly on Europe’s debt problems, which were still contributing to Wall Street wobbles, late last week, New York time.

Jeff Bresnahan, the Managing Director of SuperRatings, says:”…Australia’s super funds have been well and truly caught up in the May correction across world markets.”

He said the estimated loss – “as of yesterday” would be some 4.1 per cent.

Mr Bresnahan said, though, that this had followed “a solid gain” of 13.9 per cent over the previous 12 months.

He noted,  too, that Australian mining stocks had suffered a 2 per cent fall, immediately after the Federal government announced its new super profits tax, on the nation’s resource industries.

Thousands of Australians, who retired after the share market crash of late 2008, were shocked at the hit it inflicted on their payouts.

However, there have been significant gains since then.

Mr Bresnahan noted that.

“The solid long term results continue to reinforce the success of a diversified portfolio across various economic cycles,”
he said.

However Mr Bresnahan added a warning.

“…but the increased volatility within these portfolios is an interesting addition to the debate,” he said.

Mr Bresnahan said that complocatef the strategies that should be followed, in the new investment scene.