Around 75% of Australian workers don't choose their super fund or simply go with the fund their employer has chosen as a default fund. Default funds are often Industry SuperFunds, which are run to benefit members and have strong performance history.
The banks are lobbying the government for it to become easier for employers to adopt a bank-owned super fund as a default fund, even if it doesn't have the same strong performance history as Industry SuperFunds.
The only way to make sure your super is not at risk is to let your employer know where you want your super to go. It’s simple, just complete this Choice of Superannuation Form and give it to your employer. It will safeguard your hard earned from being switched.
BANK MANAGER 1: Chloe, Michael, I’ve got good news for you both. Your loan’s been approved. Congratulations.
BANK MANAGER 2: You can relax...it’s all done.
BANK MANAGER 3: Right then…you’re all set. Okay…now that that’s sorted…how about your super?
WOMAN: No, you’re not getting your hands on my super.
BANK MANAGER 3: No…?
WOMAN: No…I’m with an Industry SuperFund.
BANK MANAGER 3: What, one of those?
WOMAN: Yes, one of those.
ANNOUNCER: No sales incentives. Run only to benefit members.
CHARACTER:“Banks, what have banks got to do with super?”
VOICE: “Quite a lot, actually. For a start, the big banks own a lot of the big retail super funds.”
VOICE: “Yes, really.”
CHARACTER: “Well…that’s okay, isn’t it? Banks are good at making money.”
VOICE: “Yes, but banks also run their super funds to generate profits which are used to pay dividends to shareholders.”
CHARACTER: “But… I suppose all super funds do that.”
VOICE: “No. Not if you’re with a fund that carries this symbol.”
CHARACTER: “Hey, my super fund has one of those!”
VOICE: “That’s good. It means it’s run only to benefit members.”
CHARACTER: “Like me?”
VOICE: “Like you. And you also pay low fees, and never pay sales incentives.”
CHARACTER: “That’s great. I’m okay then.”
VOICE: “Yes. But what would you say if one of the big banks tried to get their hands on your super?”
CHARACTER: “I’d just say…no thanks”
VOICE: “Mmm, and why’s that?”
CHARACTER: “I’ve got my super with an Industry SuperFund so it’s in good hands. And it’s going to stay there.”
VOICE: “I like the way you think.”
THINGS YOU MAY NOT KNOW ABOUT BANK-OWNED SUPER FUNDS
- The big banks are behind lots of the big retail super funds. For example: BT Super is owned by Westpac, MLC is owned by NAB, Colonial First State is owned by Commonwealth Bank, OnePath is owned by ANZ Bank.
- Banks run their super funds to generate profits which are used to pay dividends to shareholders.
- While the banks behind retail superannuation funds have regularly made enormous profits themselves, over the last 10 years the average retail fund has delivered around $16,000 less to their members than the average Industry SuperFund.
- Despite recent rule changes banning commissions, some types of commissions are still allowed; meaning some financial planners employed by retail or bank owned super funds may continue to receive commissions from clients, even under the changes. If a financial planner has ever recommended a retail or bank owned super fund to you, you should ask them if they are still earning commissions from you and whether you would be better off shifting into commission free arrangements.
Consider a fund's PDS and your objectives, financial situation and needs, which are not accounted for in this information before making an investment decision.
* Past performance is not a reliable indicator of future performance. Assumes starting balance of $50,000 and initial salary of $50,000. Comparisons modelled by SuperRatings, commissioned by ISA. Modelled outcome shows 10 year average difference in net benefit of the main balanced options of 15 Industry SuperFunds and the 85 retail funds tracked by SuperRatings, with a 10 year performance history, taking into account historical earnings and fees – excluding contribution, entry, exit and additional advisor fees – of main balanced options. Outcomes vary between individual funds. Modelling as at 30 June 2015. See www.industrysuper.com/assumptions for more details about modelling calculations and assumptions. ISA Pty Ltd ABN 72 158 563 270 Corporate Authorised Representative No. 426006 of Industry Fund Services Ltd ABN 54 007 016 195 AFSL 232514.