Maritime decouples itself from ISA

In a statement on its website, Industry Super Australia said it had been advised that Maritime Superannuation had withdrawn from being part of the collective.

The fund’s decision to sever ties with the marketing and political arm for union and employer-linked funds came ahead of the release of the MySuper performance benchmark results on Tuesday that Maritime is widely expected to fail.

Effective 27 August, the $6 billion fund can no longer use the associated logo or be involved in any marketing campaigns using the logo.

The fund will also not be involved in any of ISA’s other programs.

A spokesperson for Maritime Super confirmed the decision will save the fund’s 24,000 members about $350,000 a year.

During a recent House economics committee inquiry, critic of the industry fund sector, Tim Wilson questioned prominent industry funds on how much they are contributing to lobby group Industry Super Australia. 

Construction industry fund Cbus revealed it had contributed more than $17.5 million to Industry Super over the past five financial years, for joint projects with the body including marketing campaigns, research, policy development and government relations.

Meanwhile, AustralianSuper reported it had contributed just over $24 million to the industry fund advocacy group from the 2016 financial year to the 2020 year.

ISA chair welcomes Maritime's decision 

Speaking about Maritime's decoupling, ISA chair Greg Combet highlighted the longstanding partnership between the fund and the lobby group, and thanked the organisation for its long-term support.

“Putting the financial interests of members ahead of everything else is what Industry SuperFunds is all about, and this decision by Maritime Super is an example of that,” he said.

The changes were announced just prior to the release of the Your Future, Your Super results, with many predicting Maritime Super will in fact have to inform its members of last year’s poorer results.

Under rules introduced in June, MySuper products that fail the benchmark test will be required to tell members, and two consecutive failures will result in a ban for new members entering the product.

“Many super members will learn for the first time, and in crystal-clear language, their retirement savings are in a product that has failed the test,” APRA executive board member Margaret Cole said on Friday.

Ms Cole said this should have the effect of lowering costs for members, “as one way an underperforming product can immediately improve its assessment against the benchmark is to lower fees”.

She noted that the enforcement of the rules is a vital tool for regulators to use, both to hold people and companies accountable and to warn others.

However, Ms Cole herself acknowledged that she did not know if superannuation funds, including Maritime, would be impacted by these changes.

“We don’t yet know what impact this heightened transparency will have, but it’s reasonable to think many members will head to the ATO’s YourSuper comparison tool seeking somewhere else to invest their money,” she said.

Ms Cole’s comments come after APRA confirmed that no product will be exempt from having its performance test results published.