Superannuation query

[Bourseboy]

I am sure one of the boffins can answer my question. I need to say upfront that I have contacted my super fund, Australian Super, on 3 occasions (phone and email) and the only response I get is referring me to their website. Australian Super uses Crediting rates. My wife's super fund uses Unit Pricing, which is great and allows me to compare various options easily, check gains/losses easily. My fund (Australian Super) uses crediting rates, which is calculated daily (about 2 days in arrears), except for Saturdays and Sundays.

Their website shows meaningful calculation for monthly rate, (100 + daily rate for day 1/100)X(100+daily rate for day 2/100)x......................(100+daily rate for last day of month/100). However, the website does not give information on how Cumulative Daily Rate is calculated.

Here are Daily Rates and Cumulative Daily Rates for Balanced Option taken from Australian Super website, which anyone can access........australiansuper.com.....Investments (3rd option along).....under heading on right side of page, choose Our Performance, scroll to just half way down page and down load Daily Rates and Cumulative Daily Rates.



Daily Rates Cumulative Daily Rates

2020-06-01 0.1531 117.9994

2020-06-02 0.1098 118.2388

2020-0601 0.6106 119.5713


My calculation for 2020-06-02 is

117.9994+0.1098% = 118.12896 (not 118.2388)


My journey started when I wanted to compare different options and track how an option had fared over time.


Thanks for reading and I hope someone can help.

 

[sptrawler]

Hi bourseboy, firstly welcome to the forum, I'm sure you will find someone on the forum who can answer your question, many are members of Australian Super and speak very highly of them.

 

[Iggy_Pop]

I use Australian Super and have tracked and analysed the detail for a number of years. I have found accuracy with their reports but have never tried to compare daily rates to cumulative rates as they are in separate spreadsheets. I have not looked at the detail you have found but if it is the case, there is probably an error somewhere. You would need to look at the longer term values and maybe it will realign. One thing I have noticed and it is mentioned in "How crediting rates and investment returns work" document on their web site is when the daily credit rates are adjusted, they seem to capture the US market from the night before when the rates are adjusted in the afternoon. The ASX changes are not reflected to the following day. The document does not mention when the cash rate, fixed interest rate, property etc are updated. One of the challenges for Australian Super is coming up with a daily rates as many markets are open when the data is updated. My thoughts are the two reports are run at different times and there is a slight variation as some of the investments due to the reports reflecting the marginal changes that occur in the time between reports. If this is the case, the numbers would align over time. Suggest checking between the two spreadsheets over a longer time period.

Iggy

 

[Junior]

I am sure one of the boffins can answer my question. I need to say upfront that I have contacted my super fund, Australian Super, on 3 occasions (phone and email) and the only response I get is referring me to their website. Australian Super uses Crediting rates. My wife's super fund uses Unit Pricing, which is great and allows me to compare various options easily, check gains/losses easily. My fund (Australian Super) uses crediting rates, which is calculated daily (about 2 days in arrears), except for Saturdays and Sundays.

Their website shows meaningful calculation for monthly rate, (100 + daily rate for day 1/100)X(100+daily rate for day 2/100)x......................(100+daily rate for last day of month/100). However, the website does not give information on how Cumulative Daily Rate is calculated.

Here are Daily Rates and Cumulative Daily Rates for Balanced Option taken from Australian Super website, which anyone can access........australiansuper.com.....Investments (3rd option along).....under heading on right side of page, choose Our Performance, scroll to just half way down page and down load Daily Rates and Cumulative Daily Rates.



Daily Rates Cumulative Daily Rates

2020-06-01 0.1531 117.9994

2020-06-02 0.1098 118.2388

2020-0601 0.6106 119.5713


My calculation for 2020-06-02 is

117.9994+0.1098% = 118.12896 (not 118.2388)


My journey started when I wanted to compare different options and track how an option had fared over time.


Thanks for reading and I hope someone can help.

This is one of the downsides of an Industry fund, versus a Retail fund or SMSF in my view....transparency and the ability to accurately compare funds & performance on a like-for-like basis.

I compare super every day as part of my job, and have consistently found Aus Super to be one of the worst in the market, in terms of making it easy to compare. Given they are so big, you'd think they could easily release monthly updates which includes all performance data over different periods to the end of previous month, i.e. 1 mth, 3 mths, 1 year, 3 years etc. This is what all retail funds do, and it makes it very easy to compare and see exactly how your money is invested and what returns are being achieved versus the index or benchmark.

 

[Iggy_Pop]

This is one of the downsides of an Industry fund, versus a Retail fund or SMSF in my view....transparency and the ability to accurately compare funds & performance on a like-for-like basis.

I compare super every day as part of my job, and have consistently found Aus Super to be one of the worst in the market, in terms of making it easy to compare. Given they are so big, you'd think they could easily release monthly updates which includes all performance data over different periods to the end of previous month, i.e. 1 mth, 3 mths, 1 year, 3 years etc. This is what all retail funds do, and it makes it very easy to compare and see exactly how your money is invested and what returns are being achieved versus the index or benchmark.

I have used Australian Super for a long period, and there is a more detailed report available when you log into your account compared to what everyone can see. The report gives daily and monthly returns on all options in a table or graph format. Bourseboy suggest you log in and slide down to the bottom of the account page and click on "view performance". Maybe this will answer your query. The data is updated daily and seems to be a higher level of information compared to the public data. Reporting is daily, annual and FY to date in table and graph.
Iggy

 

[SirRumpole]

can someone please explain this and who is likely to be affected..


https://www.abc.net.au/news/2020-06...-halve-july-because-covid-19-changes/12348612

 

[Bill M]

No one really because you don't have to do it if you don't want to.

The Government is introducing a change in the minimum drawdown of your super in pension phase. Right now a 65 y/o must draw down a minimum of 4%, they are reducing it to 2% if you want it. But it is voluntary as some people can't live on the 2% withdrawal.

Some super funds will automatically reduce it, some don't and you need to do it yourself. You need to know if your fund with drop it to 2% or not. If you are in a fund where you must elect to do it then you need to go online and make the changes yourself.

No one is forced to take the 2%, it's just the Government giving you a chance not to blow your super while values are down. It's only temporary, not forever. I myself am keeping mine at 4% so no change.

 

[SirRumpole]

No one really because you don't have to do it if you don't want to.

The Government is introducing a change in the minimum drawdown of your super in pension phase. Right now a 65 y/o must draw down a minimum of 4%, they are reducing it to 2% if you want it. But it is voluntary as some people can't live on the 2% withdrawal.

Some super funds will automatically reduce it, some don't and you need to do it yourself. You need to know if your fund with drop it to 2% or not. If you are in a fund where you must elect to do it then you need to go online and make the changes yourself.

No one is forced to take the 2%, it's just the Government giving you a chance not to blow your super while values are down. It's only temporary, not forever. I myself am keeping mine at 4% so no change.

Thanks Bill.

 

[sptrawler]

can someone please explain this and who is likely to be affected..


https://www.abc.net.au/news/2020-06...-halve-july-because-covid-19-changes/12348612

Basically the Government has deemed, that people pulling a superannuation pension, only have to pull half of what is normally required to be drawn.
So as in my position, I'm under 65 and on a super pension, normally the minimum I would have to draw out is 4%. But this year the Government has said I only have to draw 2%, so in reality it doesn't negatively affect anyone, if they wish to draw more they can just take it.
It looks like another media attention grabbing headline, that's all.
Because companies have been reducing or stopping dividends and super returns have been low, it gives people the option to withdraw less and preserve their capital.
Labor did it during the GFC.