Bank-owned super funds fail to meet social license
INDEPENDENT data shows the performance gap is widening between not-for-profit industry superannuation funds and for-profit bank-owned super.
The latest Super Monthly report shows, on average, industry super funds have outperformed bank-owned funds by more than 2% over 10 years.
Over the decade, industry fund returns were 5.15% and bank-owned 3.02% - a difference of 2.12%.
In the past 12 months, bank-owned funds returned 8.42% with industry fund returns at 11.15% - a gap of 2.74%
Industry Super Australia chief executive David Whiteley says the growing gap should be ringing alarm bells for members and the Government.
"The banks and their super funds are failing to meet their social license obligations as managers of workers' compulsory retirement savings,” he said.
"Industry's continued out performance comes down to 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 under performance.”