CFS pension members get the best returns in 2023-24

CFS FirstChoice Growth and Moderate options generated industry-leading returns for pension members for the financial year to 30 June 2024 – meaning more money in members’ pockets.

CFS FirstChoice Growth was the No.1 ranked growth option for performance over the year, while CFS FirstChoice Moderate was the top-ranked balanced option, according to independent research house Chant West.

The rankings, which compare the performance of both retail and industry super funds, were compiled by Chant West based on data collected from super providers.

CFS FirstChoice Growth was the top growth option with returns of 12% to pension members over the 12 months.  

This result was a full 2% above the industry median of 10% for growth options, which Chant West defines as having 61%-80% of assets invested in growth assets such as shares. 

Chant West ranked CFS FirstChoice Moderate as the top balanced option with returns of 10.1%. Balanced options have a lower allocation of 41%-60% to growth assets. 

This result was 2.1% above the industry median of 8% for balanced options over the 12 months to June. 

This performance was driven largely by CFS’ ability to take advantage of the strength in global and domestic shares, and that we don’t hold legacy unlisted assets that have held back other super and pension providers.  

CFS Chief Investment Officer Jonathan Armitage said the strong performance of CFS FirstChoice Wholesale Pension reflected the disciplined, diversified approach the CFS Investment team takes to managing volatile market conditions. 

“The strength of global share markets has been the core driver of investment returns over the last 12 months,” Jonathan said.  

“CFS is also in the unique position of holding no legacy unlisted assets. In an environment of higher interest rates, this has allowed us to deliver another year of solid returns for members.”

Chant West senior investment manager Mano Mohankumar said the trends driving the investment performance of account-based pensions generally mirror those of super providers overall. 

However, more money is moving into pension accounts as Australians who have benefited for longer from compulsory super begin to move into retirement.  

Figures from the super regulator Australian Prudential Regulation Authority (APRA) show benefit payments totalled $117.7 billion for the year ending in June 2024, a 15.3% increase from the year to June 2023. This was attributable partly to a 23.7% increase in pension payments and a 9.2% increase in lump sum payments over the year to June 2024. 

Total benefit payments for the quarter were comprised of $16.9 billion of lump sum benefit payments and $15.5 billion of pension payments. 

“Ideally we’d like to see pension managed differently over time,” Mano said. “But to tailor products for the pension phase you need more scale.” 

“The benefits of diversification are always important to keep in mind for pension members,” he added.