Our response to the Productivity Commission Draft Report

Today the Productivity Commission released its draft report: “Superannuation: Assessing Efficiency and Competitiveness” The aim of this investigation was to “assess the efficiency and competitiveness of the superannuation system, and to develop alternative models for allocating default fund members to products”. We wholeheartedly welcome the report, and know it will help pave the way for superannuation changes that benefit you the members, both now and in your retirement. 

The Productivity Commission collected Data directly from super funds through a survey, in which Christian Super participated. You can read the findings for yourself here.

One of the major findings of the Productivity Commission is that “unintended multiple accounts… erode members’ balances by $2.6 billion a year in unnecessary fees and insurance”. We completely agree that there is little reason to have multiple accounts. Having multiple Super accounts means you have to pay multiple sets of fees and insurance premiums. This limits the amount of  money that is invested, and therefore, thanks to compounding, the amount of money available at for you in retirement.

So if you are someone who has several Super accounts, why not consolidate right now? It may be a lot simpler than you think! Click here to learn how, or call us on 1300 360 907.

The second major finding of the Productivity Commission relates to underperformance by super funds, particularly default accounts, which is the net outcomes of investment returns and the fees and taxes charged to a member’s account. Christian Super offers 5 investment options to our superannuation members with a range of investment time horizons to suit members in different stages and with different needs. The performance of each option relative to its time horizon is listed below:

As at 31st March 2018 Time horizon Performance Benchmark Out/Under performance
Ethical High Growth 10 years 5.4% 5.7% -0.3%
My Ethical Super 7 years 7.4% 5.0% 2.4%
Ethical Balanced 5 years 6.4% 4.4% 2.0%
Ethical Stable 3 Years 3.6% 3.8% 0.2%
Ethical Cash 1 year 1.6% 1.5% 0.1%

You can learn more about choosing investment options here. 

You can also use Money Smart’s superannuation calculator to give you an indication of where you’ll be at retirement. 

The draft report also noted that “not all members get value out of their insurance”. The good news is that we have recently updated our insurance products to make sure our members are getting the best value out of your insurance. Click here to learn all about our insurance changes.

Finally, we have a unique position as a Christian business. It doesn’t necessarily make us better than any other Super company, but we do strive to be ethical in all of our work, knowing we are accountable to God as well as the industry. As Peter encourages us in the BIble, “Always let others see you behaving properly, even though they may still accuse you of doing wrong. Then on the day of judgment, they will honour God by telling the good things they saw you do.” 1 Peter 2:12 (CEV)

God bless!

– The Christian Super Team


Image supplied by Productivity Commission