Having just posted that I didn't know what adjustment would be made to my QSuper pension, I decided to go have a look into the details of the annual adjustment calculation. Turns out the annual adjustment is made on 1 July each year, and for this year the total adjustment will +2.13% (about half the inflation rate). The way the adjustment is worked out is based on how the underlying 'Balanced Risk Adjusted' fund performs relative to a 5% benchmark/hurdle (ie. if the fund annual return was 6% you would get a +1% adjustment, but if the fund annual return was 4% you would get a -1% adjustment). The investment adjustment came in at 2.01% (I.e. the underlying fund performance was 7.01% - the 5% 'hurdle'). There is also a secondary, smaller adjustment made based on the actual mortality results for the 'pool' of pension recipients relative to actuarial expectations. This year the 'mortality adjustment' was 0.12%. So the total adjustment was 2.13%.
However, this does not tell me exactly how much my fortnightly pension payments would be adjusted, as in the first year the fortnightly pension amount is adjusted upwards to take into account that you do not receive a payment during the initial 14-day 'cooling off' period, and this amount is then spread out over the remaining payments for the FY. As I started both of my QSuper pensions early in the FY, this should work out to be roughly one fortnightly amount divided by 23, 24 or 25, which would mean that my fortnightly $ amounts during this first year were about 4-6% higher than they would have been if I had received 26 fortnightly payments during the year. This would mean my pension payments should drop back by about 4%, which will then be partially offset by the 2.13% pension adjustment. So, overall, I expect my fortnightly pension payments will now be slightly (2-3%) lower than they were during the first year.
Update: I double checked when my last PP had been deposited, and it was a few days after the start of the new FY, so the annual adjustment had already been applied to my last PP. So I checked the PP amount and it had indeed decreased slightly - from the previous $1,216.98/F down to $1,176.66/F (a decrease of 3.31%).
Going forward my PP should just vary by the reporting 'adjustment amount' at the start of each FY.
Adjustments in previous years have been:
| Year | Investment adjustment (after 5% benchmark) | Mortality adjustment | Net pool result |
|---|---|---|---|
| 2025-26 | +2.01% | +0.12% | +2.13% |
| 2024-25 | +4.95% | +0.64% | +5.59% |
| 2023-24 | +2.37% | -0.50% | +1.87% |
| 2022-23 | -1.34% | -0.33% | -1.67% |
| 2021-22 | -6.45% | -0.44% | -6.89% |
| 2020-21 | +7.93% | -0.40% | +7.53% |
This means the average adjustment over the past 6 years has been 1.43%. In comparison the 5-yr average inflation rate up to 2025 was 4.21%.
Historic Performance for the underlying Balanced Risk-Adjusted fund has been:
Investment Option: Balanced Risk-Adjusted
10 yrs (p.a) 7 yrs (p.a) 5 yrs (p.a) 3 yrs (p.a) 1 yr
7.07% 6.20% 5.86% 8.19% 7.19%
The 10-yr average performance suggests that my QSuper pensions will not quite keep pace with CPI inflation, but the decline in real purchasing power will be modest over the next 20-30 years.
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