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Some super funds not so super -

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EDMOND ROY: Some Australians who've been watching their retirement nest eggs shrink over the past
year could have a little more to worry about this lunchtime.

An official league table of superannuation performance out today is showing a widening gulf in
performance between retail funds and the not-for-profit variety run by industry and government.

The prudential regulator APRA has issued a table of 200 superannuation funds and when viewed over a
five-year term industry and government funds appear to be coming out of the global downturn in much
better shape.

But the funds management industry says it's not that simple and that APRA's first ever league table
needs to be viewed with caution.

Here's our business editor Peter Ryan.

PETER RYAN: This latest check on the health of superannuation funds is significant given that it
comes direct from the prudential regulator APRA which is well known for its conservatism and
caution.

It's a complex document that's potentially open for interpretation but there's a key column on the
rate of return over five years which according to APRA's deputy chairman Ross Jones paints a clear
picture of how super funds have been faring.

ROSS JONES: I think what it tells us is that over time there are a number of funds that have been
performing effectively and more effectively than a number of others. It is a measure of the ability
of trustees to act in the best interest of members over the past five years.

PETER RYAN: The results favour industry, corporate and public sector funds.

At the top of the table is Goldman Sachs JBWere. It returned 14 per cent over five years.

Other winners in double digits include funds run by the Motor Traders Association, Australia Post,
Military Super and Uni Super.

The worst performers come from the retail side: brands like AMP, National Mutual, Suncorp and ING
just to name a few.

APRA's Ross Jones says this shouldn't be viewed as consumer information but as a guide for the
trustees who chart the direction of super investments.

ROSS JONES: If you look over the longer term there is some quite good performance but there's
also... there is a considerable range from between the top and the bottom over a five year
performance there is a considerable gap between the best performing funds and the worst performing
funds.

And we hope this type of information will encourage trustees to look at their various types of
responsibilities, look at the options that they make available to members and look at the types of
judgements that they're making on behalf of members when they're providing options for various
possibilities.

PETER RYAN: The not-for-profit superannuation sector has not surprisingly seized APRA's league
table as a milestone in their campaign against commission based retail funds.

David Whiteley is executive director of the Industry Super Network.

DAVID WHITELEY: There are no retail funds. These are funds run by major banks and insurance
companies in the top 40 performing funds. And 47 of the top performing 50 funds are all
not-for-profits.

So this has shown quite clearly that there is a structural difference in performance between retail
funds run by banks and the industry super fund sector and other not-for-profits.

PETER RYAN: But retails funds say APRA's league table is potentially misleading.

RICHARD GILBERT: I caution investors not to make decisions about which funds they should be in or
leave because this data does not directly relate to their particular investment options.

Richard Gilbert, chief executive of the Investment and Financial Services Association, is urging
caution.

RICHARD GILBERT: It's not so much the averaging out over the five years Peter, it's the fact that
this data includes all investment options. Now for some funds that works out because 90 per cent of
the money goes into one option. But for other funds the monies are spread between cash, fixed
interest, equities and what have you. For example if my members were to advertise on that basis I'm
sure that ASIC would be breathing down their necks.

PETER RYAN: Do you believe that APRA has provided the right amount of background information that
people should take in before looking at these figures?

RICHARD GILBERT: Look I think APRA's behaved responsibly here. It was asked by the Government to do
this. It's done it with the best information available but at the end of the day some of the funds
are Government run funds which clearly are subsidised in many cases to run their operations.

And people can't get into those unless they're an employee of the Government to I mean people have
to go to look at their fund and their particular investment option and not just go looking for the
top three funds.

APRA's Ross Jones says the performance numbers don't include the most recent year of the global
financial crisis.

But he had this important reminder for anyone who might be thinking about switching their fund.

ROSS JONES: I think it's always important to remember that superannuation is a longer term
investment and people should be looking always at long term performance.

People shouldn't be instantly persuaded by quarterly returns that are published in various other
sources. I think the crucial thing is to remember that performance is over the longer term.

EDMOND ROY: The deputy chairman of APRA, Ross Jones, ending that report from business editor Peter
Ryan. And the extended interview with Ross Jones will be on The World Today website later this
afternoon.