Industry Super Australia (ISA) has hit back against an attack against industry super funds by BT Financial in the Australian Financial Review (AFR) earlier this month, dismissing its various allegations.
In the AFR opinion piece, general manager superannuation at BT Financial, Melinda Howes, said that industry funds were union funds.
In retort, ISA said that union representation on fund boards stems from their Equal Representation governance model, which did not make them union funds. It also hit out against implications that this could be a bad thing.
“The participation of unions and employer associations in industry super funds is one reason why [they] delivered higher long term average net returns than retail funds owned by Westpac (BT Financial) and other bank-owned super funds,” ISA said.
Responding to Howes’ statement that “the performance of a few large funds hides the chronic underperformance of sub-scale union funds”, ISA said that “even small industry funds perform better than large retail funds”.
It said that of the 31 superannuation funds in the bottom quartile of 10-year fund-level net returns published by the Australian Prudential Regulation Authority (APRA), 29 are retail funds, including the largest funds operated by the four major banks.
Finally, firing back at Howes’ allegation that industry funds have fought against reforms aimed at transparency and accountability, ISA said that it had not fully supported the Government’s reforms only because it believed they were “significantly flawed”.
The organisation pointed to the legislation’s failure to address unpaid super, fix “gaping disclosure gaps” or ensure consistent outcomes across MySuper and Choice options as its major failings. It said that BT had opposed full transparency of payments to related parties.
ISA also attacked BT Financial itself in its response, saying that 57 of the 60 super investment options offered by BT for which SuperRatings had 10-year net returns data had lower average annual performance than the median industry fund option.
Michael Lovett, who left the investment firm just three months after launching its Vanguard Super offering, has taken up a chief executive role at an Australian asset manager.
The Central Bank of Ireland has granted the approval of Equity Trustees’ exit from its Irish operations, with the transaction expected to be complete on 30 April.
Super returns continued to climb in March, raising hopes of delivering double-digit returns by June depending on the performance of this next quarter.
The dedicated super fund for emergency services and Victorian government employees is under fire for unpaid entitlements to transport employees, which could exceed $40 million.
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