Will QSuper and Sunsuper’s A$200b Superannuation Fund save money for its members?

4 min read | March 20, 2021 02:46 AM AEDT | By Team Kalkine Media

Will QSuper and Sunsuper’s A$200b Superannuation Fund save money for its members?

Vision of the fund

This historic collaboration is believed to deliver outstanding services, greater efficiencies, and lower costs for members, thereby making Queensland a preferred destination for investment.

QSuper: QSuper, one of the largest pension funds in Australia, has about $120-billion assets, including more than $20 billion in a defined benefit fund, administered on behalf of the Queensland government. It has a member base of 6 lakh people.

Sunsuper: Sunsuper has over $80-billion assets under the management and 1.4 million members. Operating since 1987, the fund has a strong record of growth in the national market.

Australian Superannuation Industry

Superannuation is a money-saving tool, which helps people in Australia invest part of their income in the fund so that they can receive old age pension. An employee gets at least 9.5% of ordinary-time earning in their super account to get better returns in the form of pension.

The new fund, which will be the country’s largest single-manager fund, will make Australia’s $A3-trillion pension industry stronger.

Image source: © Cammeraydave | Megapixl.com

QSuper was selected as Pension Fund of the Year in 2018 at the Conexus Financial Superannuation programme. At that time, some fund managers levied unfair fees on the workers. Since then, the government has made it clear that the interest of the members should be protected at first and the super deals should prove beneficial for them at every step.

Also, the New Zealand government is making under-performing funds to participate or merge and is increasing the pressure to cut fees and boost returns.

Also read: Retire from Work, Not From Life: Superannuation And Age Pension

Review of retirement system

The Australian government has not reviewed the retirement system in more than two decades. Although the government has set up three types of retirement systems - The Age Pension, Compulsory Super Savings and Voluntary Savings.

Review to make future better

In Australia, people age and live longer. The review will look at the current situation of the Superannuation as more workers are retiring as renters and people pay mortgage even after retirement. The government should review and cover some pointers like adequate retirement income, how much contribution is sufficient from salary for Super, measures to maintain fair tax settings et al.

Image Source: © Davidwatmough | Megapixl.com

According to a report in ASFA - the peak policy, research and advocacy body for Australia’s superannuation industry, Superannuation funds are increasing investment in residential property, particularly in the embryonic build-to-rent sector and is also a key source of funding for raising the supply of social and affordable housing through investment in Government-backed bonds, issued by the National Housing Finance and Investment Corporation (NHFIC).

The First Home Super Saver Scheme (FHSSS)

FHSSS was launched in the 2017-18 Federal Budget and it saw voluntary contributions to superannuation, higher than any compulsory contributions.

In the first quarter of the 2020-21 financial year (ended 30 September 2020), almost 3,250 FHSSS release requests worth $44.1 million were received from individuals seeking the release of FHSSS amounts.

2050 Outlook

According to an ASFA Retirement Standard, the superannuation and retirement system for 2050 should be like the expenditure of age pension and tax should not be more than 6% of GDP, only 20% Australian workers should rely on age pension exclusively, and at least 50% people should be able to cover the expenditure in their retirement.

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