POWERED BY MOMENTUM MEDIA
Lobbyists take aim at banks on MySuper
Industry Super Australia (ISA) has come out swinging against the big banks, saying new data from the Australian Prudential Regulation Authority (APRA) shows why the big banks are pushing to scrap the default super safety net.
ISA said the APRA report shows that just $13 billion of savings in bank-owned and other retail funds have moved into MySuper funds, with "$77 billion of workers default super savings remaining in higher cost super funds so that banks can maximise revenues at the expense of Australian retirement nest eggs".
"This is unconscionable. The banks are lobbying the government to scrap the default super safety net so they can leverage their business banking relationships and cross-sell employee default funds to employers," ISA said in a statement.
Industry fund peak body the Australian Institute of Superannuation Trustees (AIST) called for an independent body to select default funds from the MySuper pool, saying not all MySuper products are apt for default funds.
It said the APRA data showed that out of $359 billion of savings in MySuper products, most of this is invested in industry funds.
Executive manager of policy David Haynes said the APRA data showed huge differences in fees, target returns, product type and costs across MySuper.
APRA data showed annual member fees and costs across 116 MySuper products vary from $265 to more than $1300 for a $50,000 balance.
"While generally speaking the fees in the MySuper space are lower than elsewhere, it is also clear there are some high-cost products," Haynes said.
AIST recently urged the Government to bring forward the release of non-MySuper default savings, which is mostly held in bank-owned super funds, into MySuper products.
On the other side is the Financial Services Council (FSC), which claimed the average MySuper fund its members offer has outdone its industry fund counterparts.
The FSC did not say how many funds it looked at but said they were of comparable types and sizes, and held substantial market share.
APRA member Helen Rowell warned against jumping to conclusions by looking at this interim performance data that only looks at four quarters.
Recommended for you
Jim Chalmers has defended changes to the Future Fund’s mandate, referring to himself as a “big supporter” of the sovereign wealth fund, amid fierce opposition from the Coalition, which has pledged to reverse any changes if it wins next year’s election.
In a new review of the country’s largest fund, a research house says it’s well placed to deliver attractive returns despite challenges.
Chant West analysis suggests super could be well placed to deliver a double-digit result by the end of the calendar year.
Specific valuation decisions made by the $88 billion fund at the beginning of the pandemic were “not adequate for the deteriorating market conditions”, according to the prudential regulator.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
Spire Oaktree Opportunities XI Second Close
61.07 3 y p.a(%)
2
Spire Oaktree Opportunities XI First Close USD
59.21 3 y p.a(%)
3
DomaCom Lot 21 Chellaston Road Munno Para West SA 5115 Australia
31.56 3 y p.a(%)
4
Fidante Credit Suisse Global Private Equity
31.06 3 y p.a(%)
5
DomaCom 4/27 Crombie Avenue Bundall QLD 4217 Australia
26.81 3 y p.a(%)
