# Superannuation  and Fund Returns



## Iggy_Pop (8 March 2017)

I have been following the returns on my long term superannuation fund for a number of years, and I could never get the percentage return to match what was credited to my account. It was always difficult to accurately calculate because of fortnightly contributions but the credited amount was lower than expected.   So I decided to move $200K to Australian Super and not add any more but just validate the returns over several years. I am happy to say they do seem to pay the percentages that are advertised. 

The other fund who I will not mention, I am less confident on getting the advertised rate of return. It is an Industry Fund

So I researched a bit more and found on another Industry fund the words - This percentage is a comparison rate only.  I am not sure what is actually paid after looking through the site but the comparison rate is high compared to most industry funds. Be nice if they advertised the crediting rate.

As I have a couple of ETFs outside of Superannuation, thought I would go and check what they were claiming as returns and their one page description stated I made an average of 10% over the last 2 years. I went back and while there is a difference in dates of a couple of months between the reporting dates and my purchase dates, my calculation is I am making around 3% return per year calculating dividends and capital gain. There was a couple of months difference between reporting and purchase dates, but no great spike in share price.  Somehow I am not getting the up to 7% per annum of the advertised rate.

This got me thinking what are the rules around the number advertised - is there a bit of creative accounting going on to lure in customers. Is there rules on crediting rates and any fees that are subtracted. 

Also have noticed using the Chant West Superannuation comparison that there does seem to be a number of fees across funds with different names, but customers could easily be confused with the return as well as fees deducted.

Has anyone else found potential discrepancies? I am not an accountant, but with an engineering background I always validate the facts as I see them.  Maybe my calculations are incorrect?

Iggy


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## Knobby22 (10 March 2017)

Is the unnamed fund a "for profit" fund?
Maybe they take out their cut after declaring the fund return.


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## Junior (10 March 2017)

Iggy_Pop said:


> I have been following the returns on my long term superannuation fund for a number of years, and I could never get the percentage return to match what was credited to my account. It was always difficult to accurately calculate because of fortnightly contributions but the credited amount was lower than expected.   So I decided to move $200K to Australian Super and not add any more but just validate the returns over several years. I am happy to say they do seem to pay the percentages that are advertised.
> 
> The other fund who I will not mention, I am less confident on getting the advertised rate of return. It is an Industry Fund
> 
> ...




Hi Iggy,

The advertised rates should always be accurate.  Make sure you match the dates up exactly, in terms of the rate they have advertised (i.e. over which exact period of time are they claiming a 7% return?  Then match these dates up with your account balance)

You will need to factor a few items into the calculation such as:

Underlying investment option(s) selected.
Amount and timing of contributions into the Fund.
Contributions tax.
Insurance premiums.
Member Fees.
Administration Fees.
If you have an annual statement for your account showing all transactions, you should be able to account for all of the above and determine your return.  It should always match up with what they have claimed on the website.


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## Iggy_Pop (20 April 2017)

Found an interesting article on financial calculations and approaches for superannuation funds - https://www.superguide.com.au/boost...eturns-super-fund-crediting-rate-unit-pricing
Some funds are going to unit pricing rather than crediting rate. The unit price can have a a buy/sell spread which in reality is another fee when compared to a crediting rate which is calculated during the year and actually added once per year by some of the funds. It seems funds do differ on how things are done which is probably contributes to some of the inconsistency I am seeing. 

Iggy


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