Data reinforces value of industry funds, ISA says

Recent monthly data from SuperRatings shows that industry super funds continue to outperform bank-owned funds by around 2 per cent in the short, medium and long term, ISA said in a statement.

ISA chief executive David Whiteley said the data reinforces the necessity of high-performing default super funds to ensure members’ retirement savings are being maximised.

“The reliable outperformance of industry super funds over bank-owned funds stems from a number of factors, in particular a business model that returns all profits to members and the innovative approach of collaboratively investing in large scale, long-term infrastructure projects that boost the economy and produce solid, strong net returns,” Mr Whiteley said.

“The chronic underperformance by bank-owned super funds highlights concerns over the banks’ vertically-integrated business models which continue to generate huge profits while delivering lower returns to their superannuation members.”

Mr Whiteley added that the big banks must be held accountable for their practices and explain the cause of their underperformance.

“Default super arrangements for the millions of Australians who choose to rely on this system should provide strong consumer protection,” he said.

“The default system should only include funds with a demonstrated track record of strong performance and exclude the underperformers.

“Default fund members should have a peace of mind that their savings will be shielded from poor net returns, ticket clipping and inflated related-party transactions,” Mr Whiteley said.