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No room for competition in industry fund-dominated MySuper space
Industry super funds' dominance in the modern award system means higher performing, lower fee funds are being edged out of the market, according to the Financial Services Council (FSC).
The FSC has called for the market to be opened up to greater competition after it undertook an analysis of MySuper listings and found 88 per cent were made up union and employer-owned industry funds.
Its research also revealed 83 per cent of retail funds with Australian Prudential Regulation Authority (APRA)-approved MySuper products are completely excluded from the modern awards system.
"The concentration of industry funds in the modern award system, where retail funds are prevented from competing by law, means that more than two million consumers don't get the benefit of full competition," FSC CEO Sally Loane said.
"The exclusion of 83 per cent of retail funds from the default market by the industrial tribunal means that some of the lowest fee and highest performing MySuper products are prevented from competing with industry funds."
Loane said the system is at odds with reform recommendations from the Murray Inquiry for competition in the default super market.
"The Government must move towards an open and competitive market where any APRA authorised MySuper product is free to compete," she said.
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AustralianSuper has reported a 9.52 per cent return for its Balanced super option for the 2024–25 financial year, as markets delivered another year of strong performance despite the complex investing environment.
The profit-to-member super fund’s MySuper default option has returned 9.85 per cent for the financial year 2024–25.
Colonial First State (CFS) has announced solid double-digit returns for its MySuper balanced and growth equivalent funds during the financial year.
The super fund’s Future Saver High Growth option delivered an 11.9 per cent return for the financial year 2024–25, on the back of a diversified portfolio and actively managed investment strategy.
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