Super funds deliver 20% in FY2021

Superannuation funds in Australia have delivered record average high annual returns of close to 20% in the financial year 2021, according to the Australian of Superannuation Funds of Australia (ASFA).

It said the average balanced superfunds delivered 9% per year for the five year returns and around of 8.5% for 10-year average return.

This would mean that a large portion of its members in the retirement phase were likely to see their investment returns of over 20% during the 2021 financial year, given that the investment returns in that phase were tax free.

At the same time, fees on MySuper accounts amounted to around $7.5 billion which meant returns were over 21 times of the total amount of fees paid.

ASFA’s chief executive, Dr Martin Fahy, said that typically super funds were expected to report annual returns in the order of six, seven or eight percent.

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“Clearly this is a remarkable result – the system’s strongest performance in the nearly 30 years since compulsory superannuation began,” he said.

Additionally, the Government’s 2021 Intergenerational Report (IGR) indicated that with the superannuation guarantee (SG) going to 12%, and more workers contributing to super for longer, the median superannuation balance at retirement would likely increase from around $125,000 at present to over $460,000 by 2060.

"Superannuation underpins the success of our economy. Superannuation funds invest in assets that not only provide high, long-term returns, but are also sustainable and contribute to the communities where members live, work and retire. This includes investments in public transport, affordable housing facilities and hospitals," Fahy said.