You might have noticed your account balance may have reduced by more than the amount you withdrew last financial year.
Your account balance will decrease if you make a withdrawal or receive a pension payment, but there are other factors that also affect your balance. Unlike a bank account, your pension account balance might increase and decrease based on market performance. Your pension balance is calculated based on unit prices, which can change from week to week. Keep reading to learn more.
What are unit prices?
Each one of our investment options is made up of units. The unit price is the value of each unit, and it is calculated based on the combined value of the assets (e.g. shares or property) in the investment option.
Like most super funds, Christian Super uses unit prices to calculate account balances and apply investment earnings to your account on a weekly basis. We calculate unit prices each week.
Example: Helen’s pension balance
On 1 June, Helen opens a Christian Super pension account, and chooses the Ethical Balanced Growth investment option. Her opening balance is $200,000 and the unit price is $100 per unit, therefore Helen’s receives 2,000 units in the Ethical Balanced Growth investment option.
2,000 units x $100 per unit = $200,000
Two weeks later, Helen checks her account balance and is surprised to see that it has decreased to $198,000, even though she hasn’t made any withdrawals. She calls the Christian Super Member Care Team and discovers that the unit price has decreased to $99 per unit.
2,000 units x $99 per unit = $198,000
Why do unit prices change?
Unit prices will change if the value of the assets in the investment option change. For the past few months, financial market returns have fluctuated due to global factors, such as conflict in Ukraine, the ongoing effects of COVID and the broader economy. Generally speaking, this means that the unit prices for investment options that include shares have recently declined for most super funds (depending on other asset classes’ performance and proportion). For Christian Super, only Ethical Index Shares and Ethical Stable have provided a negative return over the last three months. All other investment options have provided a positive return over the same time period.
How does Christian Super’s pension performance compare to other funds?
The table below shows that the majority of Christian Super’s pension investment options are among the top 5 performing options for the 1 year ending on 30 April 2022.
|Investment Option||Christian Super’s 1 Year Return||Median Fund Return*||Rank**|
|Pension Ethical Index Shares||5.5%||n/a||n/a|
|Pension Ethical High Growth||8.0%||4.5%||4th out of 37|
|Pension Ethical Growth Plus||9.8%||4.9%||3rd out of 56|
|Pension Ethical Balanced Growth||8.5%||3.8%||5th out of 103|
|Pension Ethical Conservative Balanced||6.3%||2.6%||2nd out of 65|
|Pension Ethical Stable||4.2%||0.6%||3rd out of 78|
|Pension Ethical Cash||0.1%||0.1%||26th out of 56|
What can I do if I am concerned about my pension account balance?
You should always take into account long term investment performance, and remember that market ups and downs are a normal part of investing, before making any decisions about your pension account. If you are concerned about the impact of unit price changes on your account balance, here are some steps you can take:
- Contact our Member Care Team – we’re here to help if you have any questions.
- Review your investment option(s) – our Member Care Team can make an appointment for you to have a FREE phone call with a financial adviser, to help you consider whether you are in the right investment option(s) based on your circumstances. We encourage you to seek financial advice before you make changes to your investment option(s).
- Review your pension payment amount – for the last few years, the Government has halved the minimum pension draw down rate, and these reduced rates will continue in the 2022/23 financial year. Click here for more information or contact our Member Care Team.
The content of this article includes advice that is general in nature and does not consider your personal situation. Christian Super encourages all people considering their options in retirement planning to seek out qualified professionals who can provide specific personal advice. Past returns are not a reliable indicator of future performance.
* Source: SuperRatings. The median is the midpoint of similar pension investment options offered by other super funds.
** Source: SuperRatings. Ranked against similar pension investment options offered by other super funds.