Refuting the Productivity Commission’s claim earlier this year that Australian Prudential Regulation Authority (APRA) regulated funds outperform self-managed superannuation funds (SMSFs), Class has released data that it says more accurately compares the two fund types to put the latter on top.
Class said that the Commission utilised inconsistent formulae, as the Australian Taxation Office’s (ATO’s) Return on Assets (ROA) for SMSFs and APRA’s Rate of Return (ROR) for its funds were misleading when compared to each other.
The software company’s like-for-like analysis of ROA showed a 5.59 per cent return for SMSFs versus 4.98 per cent for APRA funds, while comparison of ROR data showed average returns of 6.71 per cent for SMSFs and 5.58 per cent for APRA funds.
“The competing approaches used to report super performance deliver significant differences and given the dual regulators are responsible for an industry worth over $2.5 trillion, it’s time for APRA and the ATO to agree on a consistent approach to fund performance reporting,” Class chief executive, Kevin Bungard, said.
Also worth noting was that the 6.71 per cent average return for SMSFs outperformed the Productivity Commission’s benchmarks for both listed and listed plus unlisted assets.
The research house has offered a silver lining after super fund returns saw the end of a five-month streak last month.
A survey of almost 6,000 fund members has identified weakening retirement confidence, particularly among those under 55 years of age, signalling an opportunity for super funds to better engage with members on their retirement journey.
The funds have confirmed the signing of a successor fund transfer deed, moving closer to creating a new $29 billion entity.
A number of measures, including super on Paid Parental Leave, funding to recover unpaid super, and frameworks to encourage investment in the energy transition, have been welcomed by the superannuation industry.
Add new comment