Superannuation funds have exposed their pension members to more growth assets rather than employing a conservative investment mix, according to new Chant West statistics on superannuation returns.
As a result, fund members in the pension phase suffered severely from the fall in investment markets during the December quarter.
The research house said around 60 per cent of the funds on its database have between 61 and 80 per cent of their default pension options invested in growth assets that are mainly shares.
A further 40 per cent of super funds on the database use a more conservative default option, consisting of 21 to 40 per cent of growth assets.
It means pension members have had a greater than expected exposure to the Australian share market, which recorded a return of -38.9 per cent for 2008. Overseas markets generated a -24.9 per cent return over the same period.
"This is a good time for older people ... if they are in those default options with relatively high exposure to growth assets to be thinking about whether they should be," Chant West principal Warren Chant said.
Of the conservative growth options offered by super funds Equipsuper's Conservative fared the best, producing a -1.6 per cent return to for the year ended 31 December 2008.
Despite these negative returns pension members did not need to be alarmed by these statistics, Chant said.
"The thing about 2008 is that it was a very unusual event - probably a one in 100 year event. It's the sort for thing that you can't really plan for, so if you are already invested in a more conservative option there is no need to panic," he said.
