Australian super funds that earnt a AAA rating

Less than one-third of Australia’s superannuation products have been given a AAA rating.

Of the 700 products that market researcher Rainmaker reviewed in 2021, only 28 per cent earnt a AAA rating.

And while 28 per cent doesn’t seem inspiring, Rainmaker research and compliance executive director Alex Dunnin was upbeat about the result.

“It’s positive to see so many funds are consistently able to reach these AAA benchmarks and provide a quality service to their members,” he said.

Read: Advocacy group calls for cap on superannuation balances

“Superannuation returns had one of the best years on record in the 2020–21 financial year, returning an average of almost 19 per cent.

“And even despite the recent market corrections due to world events, average returns are still in the double digits.”

Rainmaker assesses funds based on investments, insurance, fees, the company and its operations and extra services.

Of the 193 products that received a AAA rating, 184 were renewed from 2021, five were rated for the first time and four were reinstated after previously being recognised with a AAA rating.

There are 173 super funds in Australia and 66 of those funds have at least one product with a AAA rating.

Read: How your superannuation affects the Age Pension

Super fund mergers means the number of funds has fallen from 389 to 173 in the past decade.

Rainmaker predicts that at this rate, Australia’s 10 biggest super funds will hold 80 per cent of the market by 2025.

“This could dramatically impact competition in superannuation and profoundly change Australia’s capital markets,” Mr Dunnin said.

Read: Can you move your shares into your superannuation?

“Super funds are getting bigger and they are able to achieve significant scale.

“They are able to service more clients at a lower cost, which also brings down the cost for members.”

Previous research from Rainmaker indicated that most fund mergers led to significant fee savings, cutting fees by an average of almost 20 per cent.

Most of the mergers are from not-for-profit super funds.

Check below to see if your fund has a AAA rating.

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Jan Fisher
Jan Fisher
Accomplished journalist, feature writer and sub-editor with impressive knowledge of the retirement landscape, including retirement income, issues that affect Australians planning and living in retirement, and answering YLC members' Age Pension and Centrelink questions. She has also developed a passion for travel and lifestyle writing and is fast becoming a supermarket savings 'guru'.
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