Despite a battering from the global financial crisis, and its still rumbling aftermath, industry super funds are holding their own compared to the share market and property.First State Super Health Division, take a bow! Last year the super fund for health workers ranked second of all balanced super funds with a 1.7% positive return. Over three years it averaged 8% making it the most successful super fund in Australia.
While 1.7% growth might not seem like much, it was a very good performance compared to the average -1.9% of the top 20 super funds (according to Super Ratings).
It was a stellar performance compared to the share market, which experienced a 15% drop (as measured by the S&P/ASX index).
And it compares very favourably to the housing market: house prices Australia-wide fell by 4.8% during 2011, according to the Australian Bureau of Statistics.
HESTA was also one of the top 10 performing super funds for 2011, with its core pool fund registering a 0.1% decline.
Last year was the first year of negative performance by super funds since the annus horribilis of 2008 when the global financial crisis broke.
The Gillard Government has flagged the introduction of significant changes to further bolster workers’ retirement incomes in these volatile economic times, with the biggest beneficiaries to be low-paid workers and women.
Moves to increase super
Superannuation for all has been a feature of Australian life following campaigns fought by unions and their members more than two decades ago.
The greatest triumph of these campaigns was the establishment of industry super funds – low cost, not-for-profit superannuation funds dedicated to the interests of members. These funds are now the envy of the world.
The Gillard Government has changes in the pipeline that will take superannuation to the next level. Among those changes are:
General Secretary Brett Holmes says the NSWNA and other unions are supporting these changes.
“We support these changes because they will deliver greater financial security for our members,” he said. “There are also broader benefits for the country as they address the problems we have with an ageing population – something many of our members have first hand experience of – and they will support the national economy with investment in national infrastructure and jobs.”
These changes to superannuation are still only proposals by the Gillard Government and are yet to be passed by parliament.
A major obstacle to their implementation is the position of Tony Abbott and the Liberal-National coalition. The cost of the superannuation increase is being met by the new mining tax. So, the increase in super will depend on parliament passing the mining tax package, something Abbott and the Coalition are vehemently opposed to.
This is consistent with previous Coalition policy on super. Under John Howard’s government there was no increase in the superannuation guarantee after 1992.The ACTU is calling on the Independents and the Greens to join with the Labor government to support the changes in the parliament.
The ACTU has an online petition that can be found at www.standupfor super.com.au.
Send a message to all members of the House of Representatives asking them to pass the laws needed to boost the super of all Australian workers.
Go to www.standupforsuper.com.au and sign the petition
The increase in the superannuation guarantee and the super tax cuts will mean a $500 billion boost to workers’ retirement funds by 2035:
For recently retired nurse, Pauline Roebuck, superannuation is all about security. She considers it an extremely important outcome from her working life and told The Lamp that it had prepared her for her retirement.
“Without super I couldn’t afford to live. It’s allowed me to maintain a lifestyle that I was used to and I could not have done that without super.”
With superannuation Pauline is still able to travel and has enough saved away to live comfortably.
“Super has contributed to the re-building of a new home and it has given me enough backup to plan regular holidays every year and big trips. I can still have an annual holiday and also go on large trips every two to three years,” Pauline said.
Even after Pauline took time off to have children, her State Super fund was in good shape when she returned to work.
“When I got back into the workforce, which was when I was just 40, super was there for me,” Pauline explained. “Once you commence paying into it, it is there for the perpetuity of your working life until you retire. If you’re going to leave work and have children then there’s still a maintained investment portfolio to keep the growth going.”
Pauline believes the Federal Government’s plan to increase superannuation payments from 9% to 12% is a good step forward.
“We’re lucky that we had compulsory contributions from the employer and it’s got to be built on. If there’s an aspiration to increase the levy I think they should be doing it.
“I think it’s well overdue and should’ve been done before. As far as I’m concerned it should’ve happened 30 years ago.”
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