Meltdown to hurt super funds

SUPER fund members are facing two consecutive monthly losses thanks to sharemarket volatility and listed property troubles.

Meltdown to hurt super funds

SUPER fund members are facing two consecutive monthly losses thanks to ongoing sharemarket volatility and trouble in the listed property sector.

The latest figures from ratings agency SuperRatings show returns for the average balanced fund were down 1.1 per cent last month.

While returns are still well up for the year at 11 per cent, managing director Jeff Bresnahan said December was almost certain to see a further erosion of some 2 per cent in earnings because of the meltdown in listed property trusts.

"The size of the LPT sell-off has the potential to hurt specific funds," he said.

While the average balanced fund only had 3.5 per cent invested in listed property in September, Mr Bresnahan said some funds had exposures of up to 16 per cent "which will certainly heavily influence December's results".

It comes after Australia's second-biggest shopping centre owner, Centro, revealed it may have to consider selling assets because it was unable to secure refinancing for some of its short-term debts.

The news sparked savage selling in the listed property sector, with the 20-member Property Trust Index shedding 11 per cent on Monday -- its biggest fall since 1987.

But despite the setbacks, Mr Bresnahan said the average super account was still showing a positive result.

"It is important that Australians understand that their super returns are directly related to risk, and that returns can be negative as well as positive over periods of time."

Meanwhile, higher food, electricity and water costs drove the cost of living in retirement 0.6 per cent higher in the September quarter, according to the latest Westpac ASFA Retirement Standard research report.

Couples seeking a comfortable retirement lifestyle now need $48,648 a year, while a more modest lifestyle will cost $26,339