Bank-owned super underperformance must be investigated

Independent data measuring the performance of Australia's superannuation funds shows not-for-profit industry super funds continue to outperform "for profit" bank-owned funds in the short, medium and long term.

The latest SuperRatings monthly data shows, on average, industry super funds have outperformed bank-owned super funds by more than 2% over 10 years.

"The habitual underperformance by bank-owned super funds is a drag on member returns and national savings, they are letting the Australian public down," said David Whiteley, Chief Executive of Industry Super Australia.

"Consistent outperformance by industry super funds over bank-owned super funds reflects the differences between for-profit and not-for-profit business models, which over the last two decades have seen significant different member outcomes."

Whiteley said that today's data highlights concerns over the banks profit driven vertically-integrated business models, which seem to be eroding member's retirement savings.

"The 'for-profit' culture enshrined in the banks business model is weighing down the super system. This is the same culture that has overseen countless financial scandals and a loss of trust in the banking sector. It is time that government acted and investigates this underperformance.

"These performance figures are a timely reminder of the need to place public policy imperatives ahead of the commercial imperative of the banks." He said.

 

 

1 Year %

3 Year %

5 Year %

7 Year %

10 Year %

Industry Super Funds

11.69

8.25

9.85

8.2

5.25

Bank-Owned Super Funds

9.85

6.23

7.75

5.98

3.16

Outperformance

1.84

2.02

2.10

2.22

2.09

 

Source: SuperRatings' April 2017 Fund Crediting Rate Survey

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

Consider your own objectives, financial situation and needs before making a decision about superannuation because they are not taken into account in this information. You should consider the Product Disclosure Statement available from individual funds before making an investment decision. Past performance is not a reliable indicator of future performance. Industry Super Australia Pty Ltd ABN 72 158 563 270, Corporate Authorised Representative No. 426006 of Industry Fund Services Ltd ABN 54 007 016 195 AFSL 232514