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Super bills fail to address underperforming bank-owned funds

Published: 21 Nov 2017

Despite the persistent underperformance of bank-owned super funds, the Coalition Government is targeting Australia’s high-performing, not-for-profit industry super funds in three bills before parliament.

New independent SuperRatings figures out today show that industry super funds continue to outperform bank-owned super funds - by 2.19 per cent over one year, 2.28 per cent over five years, and 2.1 per cent over ten years.

Industry Super Australia chief executive David Whiteley said: “The government’s superannuation bills fail to address the long-running underperformance of bank-owned and retail super funds”.

“Instead, the Government bills target Australia’s high-performing industry super funds, which are run only to benefit their members”.

“If the bills pass they could put at risk the outperformance of the industry super sector and the retirement savings of over half the working population,” he said.

“Industry super fund members might need to retire with less or be forced to work longer”.

“We are calling on parliament to do the right thing by the millions industry super members and reject the bills,” said Whiteley.

In 2016, Superannuation Minister Kelly O’Dwyer pledged to: “lift superannuation funds to at least the same standard as other financial services organisations like banks and life insurance companies” (‘Super industry laughs at O’Dwyer’, Financial Review 23 Nov 2016).

Over the past two years alone, ISA estimates that the ANZ, National Australia Bank, Commonwealth Bank, Westpac, Macquarie Bank and AMP have collectively paid over $545 million in compensation and refunds as a result of admitted or alleged misconduct – much of it in wealth management and super.

Industry super funds have not only outperformed bank-owned funds, but been immune to these scandals because of their governance model.

ISA analysis of SuperRatings Fund Crediting Rate Survey, SR50 Balanced Index, period ending October 2017

   1 Year %  3 Year %  5 Year %  7 Year %  10 Year %
Industry Super Funds 13.1 8.5 10.2 8.8 5.2
Bank-Owned Super Funds 10.9 5.9 7.9 6.4 3.1
Outperformance 2.19 2.52 2.28 2.41 2.10

Links to Industry Super Australia’s submissions on the Bills are here Trustee Arrangements; Accountability and Member Outcomes; Salary Sacrifice ; Choice of Fund.

David Whiteley is available for interview. Media contact: Phil Davey 0414 867 188.

Industry Super Australia provides policy, research and advocacy on behalf of 16 not-for-profit Industry SuperFunds who are the custodians of the retirement savings of six million Australians.

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To learn more about one of the Industry SuperFunds below click on their logo.