Monday, October 08, 2012

NOTE:  The entire post for this day was removed by Google even though it was presumably only the  post concerning  Melbourne  surgeon Adam Skidmore that was objected to.  I therefore re-post below the remaining three articles.  I have reposted the deleted article elsewhere

Workers' funds are not so super

Most funds underperform the stockmarket average and the fees charged are a lead weight.  And the rooster of today can easily become the feather duster of tomorrow.  Studying company form and making your own share purchases is hard to beat

MORE than six million Australians would have been better off stuffing cash under a mattress than putting it in their employers' default superannuation option over the last five financial years.

Today News Limited reveals the worst and best performing super funds in Australia over the past decade and the true cost of our inaction on super.

Most Australians make no active choice when it comes to super; the majority (60 per cent) have their super paid automatically into the default investment option of their employers chosen superannuation fund.

Thanks to the battering of the global financial crisis, every dollar invested in a typical default fund went backwards, after fees and taxes, by 0.3 per cent a year on average over the past five financial years, according to data from SelectingSuper, a service of research group Rainmaker.

Of the 83 default super options available over the five years, 51 delivered negative annual returns for members (6,066,129 member accounts) and 32 delivered positive returns (10,179,634 member accounts).

"The past decade, and the time since the global financial crisis especially, has been a train wreck for super funds," Alex Dunnin, head of research at Rainmaker, told News Limited.

But the SelectingSuper figures show choice of fund is crucial, revealing large and persistent divergences across fund performance.

The top performing default option REST Industry Super - delivered an average annual return of 6.7 per cent, after fees and taxes, to its nearly 2 million members over the decade.

The worst performing default option - Connelly Temple Employer Super - returned just 2.5 per cent a year to its 20,551 members.

So $10,000 invested in the worst fund a decade ago would be worth $12,800 today, but the same amount invested in the best fund would be worth $19,100 - a potential $6,300 windfall just from being in the best fund.

"We're spending all this money on super, but if you're in a dud fund, you're basically just pissing it up the wall," Mr Dunnin said.

The industry's mantra that "past performance is no guide to future performance" was not true, Mr Dunnin added.

In fact, Australians could gain a lot by comparing funds according to their longer term return over five or ten years and switching to the better performing funds.

"It's like footy teams. If you're consistently down the bottom of the league table then you're probably not going to win the championship the next year. Funds that are below average tend to stay below average."

The chief economist at CommSec, Craig James, said it was important not to make knee-jerk reactions to market downturns.

But, in theory, a person who had withdrawn money from their default super fund and put the cash under their mattress would at least have preserved the face value of their money.

"Not that this is a recommended strategy, but with the benefit of hindsight, some one who did that wouldn't have been any worse off, perhaps slightly better off."

Mr James said Australians would have to get used to more modest superannuation returns.

"I think perhaps in the past we had become too accustomed to super normal returns and expecting they were going to last forever. Really, when you think about investing for retirement, the bulk of those savings will be provided by your own hard work."


Construction code would keep militant building unions in line

THE Queensland construction industry wants a code of conduct and a state regulator to clamp down on militant building unions such as the CFMEU and BLF.

Master Builders Queensland and Australian Mines and Metals Association told a construction industry forum the increased militancy of unions was putting major construction projects at risk.

The claim follows the 59-day strike at the Queensland Children's Hospital site that stopped all construction work, and the Grocon dispute that ended in an ugly street riot in Melbourne.

Master Builders and the Australian Mines and Metals Association said it was made worse by the Federal Government scrapping the Australian Building and Construction Commission.

Master Builders construction policy director John Crittall said the commercial sector of the Queensland building and construction industry over the past year had experienced one of the most difficult periods of unlawful industrial conduct in history.

At the hospital site a picket line was run by a union activist, rather than by the officials of the union, allowing the shutdown of the site to continue after Fair Work Australia ordered a return to work and a federal magistrate banned CFMEU officials from the site.

"The critical issue is the failure of the industrial system and the building unions to abide by the rule of law," Mr Crittall said.

"The emasculation of the ABCC and militant union tactics during agreement-making under the Fair Work legislation have resulted in unprecedented periods of industrial action and lost time."

He said the construction industry needed a stable industrial environment to lure investment and create jobs.

"The failure of the industrial system to cope with industrial disputes adds further weight to the need for a new building industry code of conduct in Queensland to protect building projects."

Australian Mines and Metals Association executive director of industry Minna Knight said the resources sector had been hit by wage blowouts and long delays because of the increased union powers under Fair Work legislation.

"Resources-related construction projects are forecast to create 40,000 new Queensland jobs by 2015, with around $200 billion worth of investment either under way or in the state's pipeline," Ms Knight said.

"But these could face excessive wage blowouts, costly delays by unions stalling agreement negotiations, and illegal strike activity.

"In the recent Grocon-CFMEU dispute, we have seen construction unions openly ignore court orders to return to work and ... cause reckless damage to important developments."


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