The Association of Superannuation Funds of Australia (ASFA) has slammed “misleading analysis” of the retirement savings system as potentially have a damaging effect on Australians’ retirement outcomes.
“Far from lagging behind the rest of the world, the evidence is that Australian funds have delivered superior returns,” the association said in a statement on Saturday.
It pointed to OECD figures finding Australian funds had the highest average investment returns over the five years to the end of 2017.
ASFA also noted that returns over the last five years have averaged 10.4 per cent after fees, higher than the 8.2 per cent rate of inflation.
“It is important to compare like with like when making fee comparisons. For example, investing in government bonds may come with a lower fee, but Australian super funds achieve high returns from unlisted infrastructure, property and other investments and these cannot be obtained by investing in indexed funds,” ASFA said.
“Furthermore, fees in Australia have reduced over the past five years following the introduction of MySuper and other reforms.”
The system is sustainable, ASFA continued, noting that this metric is of crucial importance. It pointed out that Greek, Spanish and Italian systems’ high replacement rates are unsustainable and have triggered social unrest.
“The Australian system is sustainable and is projected to remain so over the next 30 years, with superannuation progressively doing more of the heavy lifting, as budgetary constraints impact age pension entitlements. Superannuation has never been so important to current and future generations,” the association said.
“The Australian superannuation system is one of the very best in the world and while there is always room for improvement, it is important to get the facts straight, because not doing so simply reduces confidence in the system, disengages the community and leads to worse outcomes in retirement.”
The strident defence comes as the sector battles claims that it is "outdated" and suffering from "structural flaws", as a recent Productivity Commission report outlined.
The Australian Prudential Regulation Authority has also warned that super funds' misrepresentations of cash holdings could be misleading savers.