Image improves, but funds still viewed as not-so-super
Article Category: Demographics
By By Geoffrey Newman, From: The Australian, 17 September 2010
SENTIMENT towards superannuation funds has improved for the first time since the onset of the global financial crisis in 2008 but more than half of working Australians still distrust their super fund.
The latest Mercer Superannuation Sentiment Index, based on a survey of 1000 people in June, showed sentiment improved 3 points to 40 out of a possible 100. Sentiment towards super had been falling since the first survey was conducted in June 2008, reaching a low of 37 points in December last year, The Australian reported.
"Confidence in superannuation took a hit with the share market volatility," Mercer Partner Heather Dawson said.
The survey also found more than half still don't trust their super fund, with only 49 per cent describing their main super fund as trustworthy.
However, Mercer said feelings of trustworthiness were linked strongly to the level of knowledge of super. Among those who regarded themselves as having high knowledge, 81 per cent trusted their main super fund while only 39 per cent in the "low knowledge" category felt the same.
Mercer noted sentiment towards super had improved with the rise in the share market in the first half of this year but warned the improvement lagged the improvement in the market, therefore the fall in the share market since its post-GFC high in April may again have turned people against super and it was yet to show up in the index.
Many super funds have struggled to outperform the share market or even cash over the past decade.
Recent research from Superratings showed the average balanced super fund, in which 80 per cent of workers have their retirement savings, returned an average 4.51 per cent a year over the past 10 years, less than an equivalent investment in Australian shares and barely ahead of a cash deposit.
Among top concerns about super from the Mercer survey were low returns and not having enough funds for retirement.