Super funds look likely to continue their recent good run and should end the year on a high, according to analysis from superannuation research house SuperRatings.
SuperRatings predicts the median balanced option will generate a return of 2.6 per cent in November, continuing the upward trajectory seen in October.
After starting the year with some heavy losses, super returns have recovered in the second half of 2022 thanks in part to the effect of rampant inflation on share returns.
The median growth option will increase by an estimated 3.2 per cent, while the median capital stable option (which has less exposure to share markets) is predicted to return a more modest 1.6 per cent.
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Kirby Rappell, SuperRatings executive director, says a positive end to 2022 for super was almost unthinkable a few months ago.
“Funds have faced a tough calendar year, though performance has improved over the last couple of months,” he says.
“If we see a small negative return or even a flat return for the typical balanced option for 2022, depending on how December plays out, this would be a better outcome than anticipated a couple of months ago.”
The positive result comes as the super industry as a whole is under increased scrutiny from the government.
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Federal financial services minister Stephen Jones told attendees at the Conexus Financial Political Series lunch in Sydney last week that the superannuation industry needed to improve the customer experience for members – or risk the sustainability of the sector.
“The customer experience needs to improve across the board … the sector is on notice,” he said.
“I want to stress the importance of the member experience to the overall sustainability of superannuation as an institution.”
Mr Jones was commenting on a report from the Australian Securities and Investments Commission (ASIC) that found many super funds had sub-standard processes for handling member complaints.
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The report said almost 20 per cent of funds failed to consistently respond to complaints within the mandatory 45-day response window and around 80 per cent of funds had “poor management of systemic issues”.
Mr Jones said he would prefer super funds to improve their service of their own volition, but warned the government would step in if needed.
“Government and the regulators will take steps to lift standards, but in a competitive marketplace, funds should be leading the way,” he said.
How did your super fund perform in November? Are you happy with your fund’s service? Let us know in the comments section below.
