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Summary
- Superannuation is a company pension program for the benefit of its workforce after retirement.
- Under this type of long-term investment, the employer contributes a fixed amount regularly.
- The employees can use the funds if they do not have a fixed source of income to rely on.
Superannuation is a company pension program for the benefit of workforce after retirement. Under this type of long-term investment, the employer contributes a fixed amount regularly.
The long-term investment is maintained till retirement. The employees can use the funds if they do not have a fixed source of income to rely on.
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Even as the superannuation industry rose by 15% this year, there are a few super funds that have outperformed the rest.
Source: © Phillipminnis | Megapixl.com
Here are top five super funds in Australia based on five-year annualised return (March 2021 APRA data):
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AustralianSuper
AustralianSuper is an industry superannuation fund, which is run only to profit members. It is owned by the Australian Council of Trade Unions (ACTU), and employer peak body, the Australian Industry Group (Ai Group). For every AU$50,000 you have in the superannuation product, you will be charged a fee of 0.6%. Five-year annualised net return on AU$50,000 balance stands at 9.7%.
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Hostplus
Founded in 1988, HOSTPLUS Superannuation Fund derives its revenue from investment activities as a superannuation fund targeted towards workers in the hospitality, tourism, recreation, and sports industries. The company has its operations across Australia. For every AU$50,000 you have in the superannuation product, you will be charged a fee of 1.26%. Five-year annualised net return on AU$50,000 balance stands at 9.58%.
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Telstra Super
TelstraSuper is a profit-for-members superannuation fund. Current and former Telstra Group employees and members of their families are eligible to invest under the plan. For every AU$50,000 you have in the superannuation product, you will be charged a fee of 1.2%. Five-year annualised net return on AU$50,000 balance stands at 9.5%.
Source: © Kgtoh | Megapixl.com
UniSuper
The industry fund provides superannuation services to employees of higher education and research sector. The fund has over 450,000 members. For every AU$50,000 you have in the superannuation product, you will be charged a fee of 0.7%. Five-year annualised net return on AU$50,000 balance stands at 9.3%.
TWUSuper
Established in 1984, TWUSUPER provides for the retirement needs of members employed within the transport and logistic industries. For every AU$50,000 you have in the superannuation product, you will be charged a fee of 1.31%. Five-year annualised net return on AU$50,000 balance stands at 7.92%.
Meanwhile, the eligible employee receives a fixed amount, usually monthly, once he qualifies for retirement. The amount that he is entitled to receive is determined by a pre-existing formula. There are certain factors that are taken into consideration while calculating the amount, such as number of years the person was employed with the company, and the employee's salary.
Source: © ronrodart | Megapixl.com
The bottom line
The benefits under superannuation plan are generally not impacted by fluctuations in the stock market. However, the funds are managed by a trustee that would invest the assets in a mix of equities and fixed securities.
Thus, the plan may have some risk of market sluggishness impacting the solvency of the fund. It may result in the plan becoming underfunded. It implies that the plan may not have adequate funds to meet the obligations in the future.
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