Senator urges restraint over super panic

SUPERANNUATION Minister Nick Sherry has urged super fund members not to panic about their poorly performing funds, saying they should look at the long-term returns, and not focus on short-term losses.

Senator urges restraint over super panic

Research firm SuperRatings estimates $70 billion has been lost by Australian superannuation funds so far this year.

The fall has been caused by the plummeting local stockmarket, which has been buffeted by the global credit crisis originating in the United States.

After four consecutive years of average double-digit returns, super fund balances are down 6 per cent on last financial year, and could finish in the negative for the first time since the 2001-02 financial year, SuperRatings says.

Yesterday, Senator Sherry warned Australians they could face the worst returns since superannuation became compulsory in 1987, but today he urged them not to panic, and to focus on the long-term gains.

"Superannuation is a long-term investment over 30 to 35 years," he told reporters outside a superannuation conference in Sydney.

"Members should look at the five to seven year rate of return when it is reported, because that gives an accurate figure."

However, Senator Sherry stepped back from his comments yesterday that this year's returns could be the worst in 20 years, saying it was impossible to predict how funds would fare with three months left of the 2007-08 financial year.

"There is still three months of the financial year to go," he said.

"The general rate of return in superannuation will be lower than the 10 to 15 per cent positive over the past five years.

"It is important for individual members to look at the five to seven year rate of return in their superannuation fund.

"It is not the first time that there have been members in Australia's superannuation system that have had negative rates of return."