Super funds are being urged to step up member communications after March delivered the worst monthly hit to super balances since September 2022, as geopolitical turmoil and oil supply disruption pushed retirement savings sharply lower and heightened the risk of members switching at the wrong time.
SuperRatings estimates the median balanced option fell 3.2 per cent in March, wiping out gains accumulated since September 2025 and dragging the SR Balanced Index’s financial year-to-date return back to 2.8 per cent.
The median growth option is estimated to have fallen 4.1 per cent, while even more defensive strategies were not spared, with the median capital stable option down 1.8 per cent.
The sell-off also hit pension members harder than those in accumulation products.
SuperRatings estimates March losses for balanced, growth and capital stable pension options all exceeded their accumulation counterparts, with the SRP Balanced Index down 3.8 per cent, the SRP Growth Index down 4.6 per cent and the SRP Capital Stable Index down 2.0 per cent.
“With just one quarter remaining in the financial year, the pathway for funds to once again outperform their long-term average is narrowing, with returns confronting elevated levels of uncertainty across both global and domestic markets”, commented Kirby Rappell, Director of SuperRatings.
“Markets are responding quickly to a rapidly evolving situation. This means we are likely in a period of greater volatility. While this will flow through to balances, it should be remembered that members’ super is usually invested across a range of asset classes (not just shares) and that over the long term, super returns remain sound.”
The sharper concern for funds now is not only performance, but behaviour.
Rappell warned periods of market stress can accelerate switching activity, with members tempted to move to cash or more defensive settings after losses have already been realised.
“When markets fall sharply, it’s natural for some members to feel uneasy and consider switching to cash,” he said.
“But switching after markets have already fallen can lock in losses and may mean missing the rebound when conditions improve, potentially leading to a poorer retirement outcome over the long term.”
That has put greater focus on how funds explain volatility to members, with Smart Communications’ Peter McGauran arguing poor or delayed messaging can quickly deepen anxiety and erode trust as balances fall in real time.
“In times of market volatility, clear communication from Superannuation funds is critical in maintaining member confidence.
“Recent market fluctuations have led to the biggest declines in super balances since 2022, creating understandable concern for Australians watching their retirement savings shift in real time.
“Without clear, timely explanations, uncertainty can quickly turn into anxiety and in some cases, erode trust in the fund provider,” McGauran said.
The firm said funds should be explaining what is happening, why it is happening and what it means for members, while avoiding jargon and helping members stay focused on long-term retirement outcomes rather than short-term market moves.
“While Superannuation is a long-term investment, short-term losses can feel immediate. To ensure customer trust, funds must communicate transparently about what’s happening, why it’s happening, and what it means for members. They need to acknowledge concerns and provide reassurance grounded in facts, not jargon.”
“Uncertain times also increase the risk of reactive decision-making, such as switching investments at the wrong time. Effective communication can help members stay focused on long-term outcomes and avoid choices that may lock in losses,” he added.
This was also commented on by outgoing HESTA chief executive, Debby Blakey, which said the super fund had seen a rise in average daily investment switching activity in March compared with the previous month, while visits to its investment landing page through online accounts climbed nearly 37 per cent.
While March was a sharp setback, SuperRatings noted long-term returns remained intact. Over one year, the SR Balanced Index is estimated to have returned 7.8 per cent, compared with 8.7 per cent for the SR Growth Index and 5.0 per cent for the SR Capital Stable Index.
Over 10 years, the annualised returns were 7.4 per cent, 8.5 per cent and 4.3 per cent respectively.
“March’s results reflect the reality that superannuation returns are being pulled in multiple directions: geopolitical issues, global market volatility, and interest rate changes all influence performance,” Rappell said.
“While negative months are difficult, it’s important to remember super is a long-term investment and markets can recover over time.”
SuperRatings said members concerned about volatility should seek financial advice from their fund or a trusted adviser before changing investment options, and understand any costs involved before proceeding.
