Only 40 per cent of superannuation funds have disclosed the CPI+ objective of their balanced option to SuperRatings, and none of them have hit their target over a three or five-year period.
SuperRatings also found that “very few” superannuation funds hit their CPI+ objective during seven or 10 year periods, and called for funds to reassess their objectives in the “new normal” of the post-GFC environment.
The call came in a SuperRatings report that found the median balanced superannuation option (60 to 76 per cent growth) returned members -1.87 per cent for the 2011 calendar year – the first negative year since it returned -19.7 per cent in 2008.
“While performance targets in some cases of 5 per cent or more above CPI over five-year periods may have been appropriate during the heady days of the bull market prior to the GFC, the fact is that we are in a new paradigm,” the report said.
SuperRatings was critical of the fact that 60 per cent of superannuation funds “still do not have measurable long-term performance targets”, adding members had no way to tell if their fund had met its objectives.
However, the report praised the fact that “an increasing number of superannuation funds are currently reviewing or looking to review their investment objectives”.
The best performance for a balanced option for the 2011 calendar year was 3.3 per cent, and the worst was -5.5 per cent, according to SuperRatings. Around 70 to 80 per cent of members are invested in their superannuation fund’s balanced option.
Conservative options did much better due to the outperformance of bonds in 2011, with the median conservative fund (20 to 40 per cent growth) returning -3.8 per cent.
The median aggressive option (77 to 90 per cent growth) returned -3.8 per cent, according to SuperRatings.
