The habitual underperformance of bank-owned retail funds hurts members and the Australian economy, Industry Super Australia (ISA) believes.
An ISA analysis found over a 19-year period, Australia’s retirement savings pool would have been $105 billion higher if retail funds had matched industry super fund returns.
ISA chief executive, David Whiteley, said: “Bank-owned and retail super funds are a drag on Australia’s retirement incomes and national savings”.
ISA found the two key reasons for underperformance were investment philosophy, and fund structure and governance.
“Reform of the sector must be based on retaining a safety net of the best performing super funds for the estimated eight million workers that do not choose their own fund,” Whiteley said.
“National super savings are worth $2 trillion and super investment is now a major driver of economic activity. The evidence is also telling us that a super system run only to benefit members would also deepen our capital base, boost the economy, and raise the living standards of retirees across the board.”
