Advertised Superannuation Returns

Just like everything else on TV or what we hear in the media, it is important to do your own research, as not everything said applies to each individual in the same way. This is also true for advertised superannuation returns. Not too long ago, many funds released their versions of the June 30, 2024, end-of-financial-year annual returns for their various investments. While these returns are generally correct (based on what they disclose), it is important to remember that each member in each fund has a different investment journey and, therefore, a different investment return. Many individuals are either adding money regularly while they are still working or withdrawing/selling to fund pension payments in retirement.

Let’s say Person A had $100,000 invested in one superannuation product’s “Balanced Investment Option” for the entire year, made no withdrawals, and incurred no administration fees. Person A saw their super fund disclose a 7% return on TV for the financial year. In this case, their return would be 7%. However, if Person B had $100,000 (with the same superannuation product and investment as Person A) but made a withdrawal of $10,000 when markets crashed, they would see the same advertised return of 7% on TV. However, they may have crystallized some losses, meaning their individual return would be lower.

When returns are advertised on TV, they do not take into account each individual’s circumstances. Therefore, it is important to review your superannuation statement, as this will generally show a dollar figure representing YOUR actual return. Note that many funds might not disclose a percentage-based figure for YOUR individual return, only the dollar amount.