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$4 trillion in savings. $43 billion in fossil fuels. chosen by your employer's payroll department. here's what nobody's reading.
Australia's superannuation system holds above $4 trillion in total assets, managed by roughly 140 APRAAustralian Prudential Regulation Authority. They oversee banks, super funds, and insurers to make sure your money is handled properly. Think of them as the safety inspector for financial institutions.-regulated funds. Employers contribute 11.5% of ordinary time earnings, rising to 12% by July 2025. It's compulsory. You don't opt in.
The median balance for a 30-34 year old is around $45,000. Women retire with roughly 25% less super than men. About 40% of accounts are in default MySuperA standardised, low-cost default super product that every super fund has to offer. If you never chose a specific option, this is probably where your super sits. products.
The Mercer Global Pension Index consistently ranks Australia in the top tier globally. The median growth fund returned around 8.1% per annum over the 10 years to June 2024. MySuper, introduced in 2014, created a standardised default product with capped fees.
A typical MySuper "balanced" portfolio: Australian equities 20-25%, international equities 25-35%, fixed income 10-15%, property 5-10%, infrastructure 5-15%, alternatives 5-10%, cash 3-8%. Roughly half your super is in shares.
AustralianSuper, with over $340 billion in assets, holds significant positions in BHP, CBA, CSL, and Woodside. Your $45,000 default balance is a rounding error to these funds, but collectively, millions of default members make up the majority of assets.
Market Forces tracks fossil fuel investments across super funds. The largest default funds hold billions in fossil fuel companies.
AustralianSuper held an estimated $14+ billion in fossil fuel companies including Woodside and Santos. Some funds have started moving. HESTA has excluded thermal coal and oil sands. But most default MySuper products still track broad indices, and those indices include fossil fuel companies by design.
ASIC's MoneySmart calculator shows: on a $50,000 starting balance with $10,000 annual contributions over 40 years at 7% return, the difference between 0.5% and 1.5% in fees is approximately $390,000. Same contributions. Same gross return. The only difference is fees.
Default insurance premiums are deducted from your balance, often without you realising. The Productivity Commission found default insurance was eroding balances for low-income members and young workers.
S&P's SPIVA scorecard shows that over 15-year periods, roughly 85% of Australian active equity managers underperform their benchmark index after fees. Benchmark-hugging (closet indexing) is common — AFR research identified funds with correlation coefficients above 0.95 with their benchmark while charging active fees.
You can change where your super goes. It takes about 20 minutes. ASIC's MoneySmart site walks you through the process.
Australian Ethical Super screens out fossil fuels, weapons, tobacco, and gambling. Future Super has a zero fossil fuel commitment. Both are APRA-regulated with MySuper products you can compare on the ATO's YourSuper comparison tool.
Your default super fund was chosen by your employer's payroll department. Your investment option was chosen by nobody. Your fossil fuel exposure was chosen by an index. None of those decisions were yours. They can be.
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