Skip to main content
×
Home

Cost, performance and portfolio composition of small pension funds in Australia

  • WILSON SY (a1)
Abstract
Abstract

Compared with large institutional pension funds, there is relatively little published research on small funds, which are defined in the Australian superannuation legislation as pension funds with less than five members. Small funds account for more than 20% of total pension assets and they are one of the fastest growing sectors and therefore play a significant part in the savings strategy for national retirement income. This paper contributes to the needed research by analysing the more granular audited accounting data collected for the subset of small funds regulated by the Australian Prudential Regulation Authority (APRA) over the last few years. The analysis provides new insights into the operating costs involved in running the funds, the investment performances and portfolio compositions of Small APRA Funds (SAF).

Copyright
References
Hide All
APRA (2005) Statistics Superannuation Trends September 2004 (issued 11 January 2005). Available online at http://www.apra.gov.au.
APRA (2006a) Statistics Annual Superannuation Bulletin June 2004 (revised 20 April 2006). Available online at http://www.apra.gov.au.
APRA (2006b) Statistics Annual Superannuation Bulletin June 2005 (issued 20 April 2006). Available online at http://www.apra.gov.au.
APRA (2006c) Statistics Quarterly Superannuation Performance March 2006 (issued 29 June 2006). Available online at http://www.apra.gov.au.
Asher A. (2004) Short changed: conflicted superstructures. Paper presented at the 12th Annual Colloquium of Superannuation Researchers, Sydney, July 2004.
ASIC (2005) Industry fund services agree to change advertising. ASIC Media and Information Release 05-148, 3 June 2005. Available online at http://www.asic.gov.au.
ASX (2005) 2004 Australian share ownership study. The Australian Stock Exchange, 24 February.
Barrett J. (2007) Future favourable for index funds. The Australian Financial Review, 13 June.
Bateman H. and Thorp S. (2007) Decentralized investment management: an analysis of non-profit pension funds. Journal of Pension Economics and Finance, 6(1): 2144.
Benartzi S. and Thaler R. (1995) Myopic loss aversion and the equity premium puzzle. The Quarterly Journal of Economics, 110(1): 7392.
Bogle J. C. (2006) Investment wisdom and human values. Speech to the United States Military Academy West Point, April 2006.
Brinson G. P., Hood L. R., and Beebower G. L. (1986) Determinants of portfolio performance. Financial Analysts Journal, July/August: 3948.
Brinson G. P., Singer B. D., and Beebower G. L. (1991) Determinants of portfolio performance II: an update. Financial Analysts Journal, May/June: 4048.
Brown S. J., Goetzmann W. N., and Bing Liang (2004) Fees on fees in funds of funds. Yale ICF Working Paper No. 02-33, 14 June 2004.
Brown J. R., Liang N., and Weisbenner S. (2007) Individual account investment options and portfolio choice: behavioral lessons from 401(k) plans. Journal of Public Economics, 91: 19922013.
Burtless Gary (2003) What do we know about the risk of individual account pensions? Evidence from industrial countries. The American Economic Review, 93(2): 354359.
Coleman A. D. F., Esho N., and Wong M. (2003) The investment performance of Australian superannuation funds. Australian Prudential Regulatory Authority, Working Paper 2003–01.
Coleman A. D. F., Esho N., and Wong M. (2006) The impact of agency costs on the investment performance of Australian pension funds. Journal of Pension Economics and Finance, 5(1): 126.
Drew M. E. and Stanford J. D. (2003) Principal and agent problems in superannuation funds. QUT Discussion Papers in Economics, Finance and International Competitiveness, Discussion Paper No. 142, March 2003.
Esho N., Coleman A., Thavabalan N., and Bullock M. (2004) Superannuation do-it-yourself? APRA Insight, 1st Quarter 2004, pp. 1018.
Faruquee H., Li S., and Yan I. K. (2004) The determinants of international portfolio holdings and home bias. IMF Working Paper WP/04/34.
Huberman G. and Jiang W. (2006) Offering versus choice in 401(k) plans: equity exposure and number of funds. The Journal of Finance, 61(2): 763801.
Ibbotson R. G. and Kaplan P. D. (2000) Does asset allocation explain 40, 90, or 100 percent of performance? Financial Analysts Journal, January/February: 2633.
Izan H. Y., Jalleh B. R., and Ong L. L. (1991) International diversification and estimation risk. Australian Journal of Management, 16(1): 7391.
Levy H. and Sarnat M. (1970) International diversification of investment portfolios. The American Economic Review, 60(4): 668–75.
OECD (2007) Pension markets in focus. OECD Directorate of Financial and Enterprise Affairs, Issue 4, November 2007.
Rice M. (2007) Superannuation fees report. Paper prepared by Rice Walker Actuaries Pty Ltd. for IFSA, May 2007.
Roberts M. (2002) Self-managed superannuation funds – overview. Paper presented at the 10th Annual Colloquium of Superannuation Researchers, Sydney, July 2002.
Rothman G. P. (2007) The adequacy of Australian retirement incomes – new estimates incorporating the Better Super reforms. Paper presented at the 15th Australian Colloquium of Superannuation Researchers, Sydney, July 2007.
Valentine T. (2003) Is superannuation safe? The Australian Economic Review, 36(1): 108–17.
Valentine T. (2004) Regulation of DIY superannuation funds. The Australian Economic Review, 37(2): 215–21.
Venkatramani R. (2004) Superannuation industry overview. APRA Insight, 4th Quarter 2004: 212.
Vivian R. (2006) Self managed super funds – Our role in the superannuation system. Speech to the National SPAA Conference, Sydney, 3 March 2006. Available online at http://www.ato.gov.au.
Recommend this journal

Email your librarian or administrator to recommend adding this journal to your organisation's collection.

Journal of Pension Economics & Finance
  • ISSN: 1474-7472
  • EISSN: 1475-3022
  • URL: /core/journals/journal-of-pension-economics-and-finance
Please enter your name
Please enter a valid email address
Who would you like to send this to? *
×

Metrics

Full text views

Total number of HTML views: 3
Total number of PDF views: 19 *
Loading metrics...

Abstract views

Total abstract views: 108 *
Loading metrics...

* Views captured on Cambridge Core between September 2016 - 25th November 2017. This data will be updated every 24 hours.