Super funds take $100bn hit

MORE than $100 billion has been wiped out of Aussie superannuation funds as the global financial meltdown worsens.

Super funds take $100bn hit

MORE than $100 billion has been wiped out of Aussie superannuation funds as the global financial meltdown worsens.

At yesterday's close of business the average balanced superannuation fund had lost almost 12 per cent during the past year, according to estimates by research firm SuperRatings.

The losses are being caused by a writedown in share values as markets around the world continue to take a beating.

The Australian market took another 0.6 per cent dive yesterday.

Property markets and other investments are also now suffering as many investors lose confidence and consumers cut spending.

"Some people will have lost 20 to 25 per cent during the past year depending on their investment option,'' SuperRatings managing director Jeff Bresnahan said.

"Bad news just keeps pouring out of the United States which affects their market and, in turn, our market.

"The reality is most of us are 55 per cent invested in the sharemarket so these sharemarket falls are feeding straight through to our super fund returns,'' he said.

"But it's getting really serious for those people in and around retirement.

"Certainly there will be a large number of Australians reconsidering their imminent retirement or even considering returning to work if they have recently retired.''

Many older people are already delaying retirement and are worrying about their superannuation.

"People are reporting to us that the uncertainty on markets is causing them great stress and worry,'' National Seniors Australia chief executive Michael O'Neill said.

"They are reviewing their retirement plans because they just don't know how the problems in the US will impact on us here.''

However, new investors are also feeling the pain.

"The greatest anxiety we are seeing is from people who have begun investing in the past 12 to 24 months, people who are new and have never suffered a correction before,'' financial adviser John Hewison, from Hewison and Associates, said yesterday.

Many of these investors are taking a loss, cashing out of the share market and looking for the security of bank accounts, with almost every major bank reporting a rise in deposits.

The amount of money on deposit in banks has risen about 3 per cent in the past month, according to the regulator, the Australian Prudential Regulation Authority.

But Mr Bresnahan does not consider this a good move.

"If you invested $100,000 five years ago into cash investments it would have given you about $27,000 in total returns,'' he said.

"If you invested $100,000 five years ago into the sharemarket it would have given you about $54,000 in returns.

"It still applies, a balanced portfolio will outperform cash and people just need to stick with it for the long term.''