The retirement savings of AustralianSuper’s more than 2 million members has increased above the $100 billion mark for the first time.
AustralianSuper has hit the milestone as a result of strong growth in returns, an increase in the membership base and a strong focus on driving down costs to members.
Chief Executive Ian Silk said it was a major step for members and underlines the strength of the profit to members’ philosophy that underpins AustralianSuper’s business model.
“We are very proud of all the work that has been done to try and ensure that members can retire with the biggest possible savings to assist in providing them with an income in retirement for their post-work life,” he said.
“The members’ first business model at AustralianSuper has included undertaking a major internalisation of investment management with the aim of driving down investment costs and to deliver strong returns for members. The Fund has delivered a total return of just over 50 per cent over the past four years.
“AustralianSuper is also moving to play a bigger role on the global investment stage providing members access to some of the biggest and best deals worldwide.”
AustralianSuper’s size and growth has allowed for a greater focus on direct investment over recent years and meant that members can benefit from increased returns from being involved in major domestic and global deals such as:
$1.1 billion purchase of a stake in the Ala Moana shopping centre
$1.3 billion acquisition of 67.5% stake in the King’s Cross development in London
$5 billion purchase of Port Botany and Port Kembla in NSW as part of the Industry Funds Management led consortium NSW Ports
$7 billion Queensland Motorways deal as a member of the Transurban consortium.
AustralianSuper has also maintained a clear focus that every dollar is part of a member’s retirement savings and has worked hard to keep costs low. The Fund’s administration fee has been frozen at $1.50 per week since 2009 with no additional asset based administration fee.
The combination of strong long term performances and low fees means that a member who had $100,000 in the Fund’s Balanced option in 2006, and who received Superannuation Guarantee contributions based on average weekly earnings, would now have a retirement balance of more than $256,000.
AustralianSuper’s Balanced option – with almost 75% of member assets – delivered a return of 4.54% for the 2015-16 financial year, despite facing weak equity markets globally.
This result is expected to put AustralianSuper within the top quartile of super fund results. It also comes after three years of consecutive double digit growth and was the seventh consecutive year of positive returns.
AustralianSuper was founded from the merger of two superannuation funds ARF and STA on 1 July 2006 with a combined asset base of $21 billion and 1.2 million members. Ten years later, AustralianSuper has $100bn and 2.1 million members.
