POWERED BY MOMENTUM MEDIA
Superannuation savings vulnerable to troughs
Superannuation funds need to do more to protect members from drops in the economic cycle, according to QSuper chief strategy officer Michael Pennisi.
During a panel session at the Actuaries Institute Financial Services Forum, Pennisi said that default funds are so heavily weighted towards equities that superannuation funds must consider implementing a different process to deliver a better outcome to members.
The answer to that problem was not only an investment issue, but needed to take into account contributions, longevity and insurance - all wrapped up in holistic advice, he said.
Pennisi said QSuper was considering introducing defined benefit thinking into an accumulation scheme to tackle the problem.
Defined benefit members did better than accumulation members during the GFC, he said.
According to QSuper member research, most members see default balanced funds as a recommendation, he said.
That challenged QSuper's board to think about whether they were delivering the best outcomes for members, Pennisi said.
"Members are seeking adequacy and are being conservative," he said.
Pennisi also argued that superannuation fund members did not care about their returns compared to other funds, and funds should not be wasting their time flaunting these.
"Members live and breathe by what we put into their accounts, so is the reason the industry is following each other a competition, or because we have the wrong objective?" he asked.
Members were fearful of whether they had enough money in their account, Pennisi said.
AUTHOR
Staff Writer
Money Management staff writers are writers who contribute to the website from time to time. If you would like to discuss the content contained within this article please contact us.
Recommended for you
The lower outlook for inflation has set the stage for another two rate cuts over the first half of 2026, according to Westpac.
With private asset valuations emerging as a key concern for both regulators and the broader market, Apollo Global Management has called on the corporate regulator to issue clear principles on valuation practices, including guidance on the disclosures it expects from market participants.
Institutional asset owners are largely rethinking their exposure to the US, with private markets increasingly being viewed as a strategic investment allocation, new research has shown.
Australia’s corporate regulator has been told it must quickly modernise its oversight of private markets, after being caught off guard by the complexity, size, and opacity of the asset class now dominating institutional portfolios.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
DomaCom DFS Mortgage
92.15 3 y p.a(%)
2
Global X 21Shares Bitcoin ETF
53.24 3 y p.a(%)
3
Global X GlobalX FANG+ ETF
43.15 3 y p.a(%)
4
DomaCom Shoreline North Coogee
36.26 3 y p.a(%)
5
GAM LSA Private Shares AU I
35.87 3 y p.a(%)
