Bank-owned super funds falling short

Independent data on Australia’s superannuation funds shows that the performance gap is widening between not-for-profit industry super funds and for-profit bank-owned super funds.

 

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 growing gap between industry fund and bank-owned fund performance should be ringing alarm bells for members of bank-owned super funds and the Government,” said David Whiteley, Industry Super Australia chief executive.

 

“The banks and their super funds are failing to meet their social license obligations as managers of workers’ compulsory retirement savings.”

 

“Industry super fund continued outperformance comes down to industry super funds asset allocation and the questionable profit orientation of bank-owned super funds which is eroding their members’ nest eggs.

 

“The decade long failure of the banks to match industry super funds returns could means millions of Australians retiring with less or working longer.

 

“The data brings into question the legitimacy of bank-owned super funds as a part of the compulsory super system given their chronic underperformance,” he said.

 

Fund type

1 Year %

3 Year %

5 Year %

7 Year %

10 Year %

Industry Super Funds

11.15

7.98

10.54

8.96

5.14

Bank-Owned Super Funds

8.42

5.80

8.33

6.68

3.02

Outperformance

2.74

2.19

2.22

2.28

2.12

Source: ISA analysis of SuperRatings Fund Crediting Rate Survey, SR50 - balanced option medians, June 2017

 

Industry super funds have also dominated SuperRatings top 10 rankings for balanced options for the year to June 2017, delivering superior returns to their members.

 

30 July 2017.