Super let-down for retirees

LENNOX HEAD self-funded retiree Georgette Hastie Bell vividly remembers watching her superannuation savings ‘going down and down' when the global financial crisis hit.

Yet while super returns have staged a turnaround and posted double-digit gains for the last financial year, Ms Hastie Bell remains anxious about future performance.

“When the GFC hit I was scared, to be honest,” she said. “Once you've had a considerable loss, you don't like to lose again, and at my age I can't replace it.”

The median balanced superannuation funds, in which the majority of Australians are invested, returned 11 per cent in the financial year to June 30 – a significant turnaround from the 6.4pc loss in 2007/08, according to SuperRatings.

These funds also beat the benchmark S&P/ASX200 that returned 8.7pc for the same period – suggesting this year at least the well-paid fund managers earned their fees, which is about 1pc of total returns.

Since the onset of the GFC, people have reduced voluntary contributions by more than half, and fewer new members have joined.

Ms Hastie Bell said when the financial crisis hit, she moved most of her retirement savings into cash to avoid the ongoing shocks of the sharemarket and plans to keep it there, regardless of the turnaround by balanced funds.

“It was a precaution. I just wanted to get away from the sharemarket. I plan to stay in cash because it is still such a wobbly time,” she said.

SuperRatings managing direc-tor Jeff Bresnahan said the results underlined the importance of people choosing the right fund.

“Whilst not looking great on paper, in a relative sense, balanced options have achieved what they set out to do, namely, to prevent significant losses through diversification,” he said.

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