Superannuation is now very much super-sized.
In September 2023 there was more than $3.5 trillion invested in super, up 8.5% in just 12 months. That’s significantly more than the $2.5 trillion combined value of all the stocks on the ASX. And with at least 11% of everyone’s wages being added each year, Australia’s superannuation system is only going to get bigger.
The funds themselves are also getting bigger, due to a combination of organic growth and a spate of mergers. At June 2023 there were 107 funds regulated by APRA (not including small APRA funds), but this number is predicted to fall as the industry continues to consolidate.
The 2018 Productivity Commission inquiry into superannuation, and the banking Royal Commission that followed, put the spotlight on underperforming funds. As a result, APRA has published annual performance tests for MySuper and Choice super funds to put pressure on poor performers to merge or exit the industry.
Another consequence of the Royal Commission has been an outflow of members and their money from the retail superannuation sector to industry funds. This trend is highlighted in the latest list of 20 largest super funds.
Bigger is not always better, but the Productivity Commission found that it can pay to be with one of the larger funds:
Evidence of economies of scale is compelling – larger fund size is strongly associated with lower average costs in the Australian superannuation system. For example, annual cost savings of at least $1.8 billion could be realised if the 50 highest cost funds merged with the 10 lowest cost funds. The presence of these potential gains, particularly from further consolidation, reflects a lack of effective competition in the system.
Productivity Commission
So, collectively, Australians would be paying less fees if there were fewer, larger funds. But does that mean larger funds have delivered better performance as well as lower fees? The answer is not clear cut.
Scale benefits also manifest through increasing returns to scale. Net returns are positively related to size for not-for-profit funds. (No corresponding correlation was found for retail funds.) Stronger net returns among larger not-for-profit funds might be due to higher exposure to unlisted asset classes, but data limitations rule out strong conclusions. Larger funds do appear, however, to make better investment decisions within asset classes. Scale benefits also manifest through increasing returns to scale. Net returns are positively related to size for not-for-profit funds. (No corresponding correlation was found for retail funds.) Stronger net returns among larger not-for-profit funds might be due to higher exposure to unlisted asset classes, but data limitations rule out strong conclusions. Larger funds do appear, however, to make better investment decisions within asset classes.
There is little evidence that realised economies of scale have systematically been passed through to members in the form of lower fees. Scale benefits may have been passed through in the form of member services or increases in reserves or offset by the costs of meeting new regulatory requirements. And not for profit funds, on average, might have passed through some scale economies by investing more heavily in (higher cost) unlisted assets and obtaining higher returns.
Productivity Commission
Whatever your objectives, it pays to at least be aware which funds are gaining members and growing assets, as a point of reference when benchmarking your own super fund.
In the tables below you can find the 20 largest super funds, ranked according to their total number of members and also the value of total assets under management, as at 30 June 2023. As you can see, industry funds dominate the top of both tables.
- AustralianSuper remains the biggest fund in terms of both assets and members, with assets worth $311 billion (up 27% in two years, and 3,255,344 members (up 24% in two years).
- Australian Retirement Trust (formed by the merger of QSuper and Sunsuper in 2022) sits in second place in terms of both assets ($264 billion) and members (2,334,304).
- In terms of members, REST is the 3rd largest (2,023,006), and Hostplus is the 4th largest (1,758,858). You need to go down to 8th place to find the top-ranking retail fund, MLC Super Fund (847,462 members). However, most retail funds that made the list lost members over the year, including MLC.
- Aware Super is currently the 3rd largest in terms of assets (and 5th largest in terms of members) while Unisuper is the 4th largest in terms of assets (and 13th largest in terms of members). Public sector funds like Aware, and industry funds with predominantly white collar members such as UniSuper, tend to have higher average member balances.
- Of the 20 largest super funds, some of the biggest movers in terms of members and assets were the result of mergers (Brighter Super merged with Suncorp following earlier mergers with LGIAsuper and Energy Super), while ASGARD Independence Plan Division Two is a rebranding of BT Panorama Retirement Wrap.
- The biggest fall in terms of members and assets (both down 19%) was retail fund Wealth Personal Superannuation and Pension Fund which failed the 2023 APRA performance test, an indication that the test has bite.
20 largest super funds (by members)
| Members rank | Fund name | Total number of members | Total assets ($ billion) | Average member account balance | Growth in number of member accounts | Fund type | Assets rank |
|---|---|---|---|---|---|---|---|
| 1 | AustralianSuper | 3,255,344 | $311 | $92,000 | 13% | Industry | 1 |
| 2 | Australian Retirement Trust | 2,334,304 | $264 | $106,000 | 5% | Industry | 2 |
| 3 | REST | 2,023,006 | $77 | $37,000 | 5% | Industry | 12 |
| 4 | Hostplus | 1,758,858 | $97 | $53,000 | 10% | Industry | 6 |
| 5 | Aware Super | 1,194,591 | $164 | $134,000 | 3% | Public Sector | 3 |
| 6 | HESTA | 1,026,691 | $79 | $73,000 | 6% | Industry | 11 |
| 7 | Cbus | 917,027 | $86 | $91,000 | 5% | Industry | 8 |
| 8 | MLC Super Fund | 847,462 | $82 | $96,000 | -8% | Retail | 10 |
| 9 | Mercer Super | 842,813 | $66 | $77,000 | 185% | Retail | 14 |
| 10 | Retirement Portfolio Service | 696,046 | $35 | $51,000 | -3% | Retail | 20 |
| 11 | AMP Super Fund | 686,575 | $56 | $81,000 | -8% | Retail | 16 |
| 12 | Colonial First State | 651,139 | $89 | $136,000 | -3% | Retail | 7 |
| 13 | UniSuper | 648,818 | $127 | $178,000 | 23% | Industry | 4 |
| 14 | Spirit Super | 348,425 | $29 | $79,000 | 5% | Industry | 23 |
| 15 | ASGARD Independence Plan Division Two | 279,975 | $67 | $240,000 | 196% | Retail | 13 |
| 16 | Wealth Personal Superannuation and Pension Fund | 255,607 | $56 | $216,000 | -19% | Retail | 17 |
| 17 | Brighter Super | 250,194 | $41 | $120,000 | 95% | Public Sector | 18 |
| 18 | Smart Future Trust | 230,542 | $6 | $23,000 | 7% | Retail | 45 |
| 19 | Care Super | 222,897 | $22 | $94,000 | 2% | Industry | 29 |
| 20 | Public Sector Superannuation Scheme | 214,774 | $110 | $498,000 | -1% | Public Sector | 5 |
Source: APRA
20 largest super funds (by assets)
| Assets rank | Fund name | Total assets ($ billion) | Total number of members | Average member account balance | Growth in number of member accounts | Fund type | Members rank |
|---|---|---|---|---|---|---|---|
| 1 | AustralianSuper | 311 | 3,255,344 | $92,000 | 13% | Industry | 1 |
| 2 | Australian Retirement Trust | 264 | 2,334,304 | $106,000 | 5% | Public Sector | 2 |
| 3 | Aware Super | 164 | 1,194,591 | $134,000 | 3% | Public Sector | 5 |
| 4 | Unisuper | 127 | 648,818 | $178,000 | 23% | Industry | 13 |
| 5 | Public Sector Superannuation Scheme | 110 | 214,774 | $498,000 | -1% | Public Sector | 20 |
| 6 | Hostplus | 97 | 1,758,858 | $53,000 | 10% | Industry | 4 |
| 7 | Colonial First State | 89 | 651,139 | $136,000 | -3% | Retail | 12 |
| 8 | Cbus | 86 | 917,027 | $91,000 | 5% | Industry | 7 |
| 9 | Military Superannuation & Benefits Fund No 1 | 85 | 182,514 | $463,000 | 0% | Public Sector | 23 |
| 10 | MLC Super Fund | 82 | 847,462 | $96,000 | -8% | Retail | 8 |
| 11 | HESTA | 79 | 1,026,691 | $73,000 | 6% | Industry | 6 |
| 12 | REST | 77 | 2,023,006 | $37,000 | 5% | Industry | 3 |
| 13 | ASGARD Independence Plan Division Two | 67 | 279,925 | $240,000 | 196% | Retail | 15 |
| 14 | Mercer Super | 66 | 842,813 | $77,000 | 185% | Retail | 9 |
| 15 | CSS Fund | 63 | 99,396 | $634,000 | -3% | Public Sector | 32 |
| 16 | AMP Super Fund | 56 | 686,575 | $81,000 | -8% | Retail | 11 |
| 17 | Wealth Personal Superannuation and Pension Fund | 56 | 255,607 | $216,000 | -19% | Retail | 16 |
| 18 | Brighter Super | 41 | 250,194 | $120,000 | 95% | Public Sector | 17 |
| 19 | Macquarie Superannuation Plan | 38 | 126,121 | $299,000 | 19% | Retail | 27 |
| 20 | Retirement Portfolio Service | 35 | 696,046 | $51,000 | -3% | Retail | 10 |
Source: APRA
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