ASIC is reportedly investigating if super funds gouged fees from members by only transitioning them to MySuper products at the last minute.
Default superannuation accounts were required to be transferred to MySuper products during a four year transition period, which ended 1 July 2017. In 2016 Industry Super Australia released a report accusing ‘bank-owned’ retail super funds of “gouging” up to $1.8 billion from super fund members by only slowly moving them to MySuper products.
ASIC is now, according to The Australian, investigating how the MySuper transition was handled and surrounding disclosures. Industry Super Australia welcomed the news that ASIC was investigating.
“This fee gouge is another grave episode in a long series of shocking bank behaviour,” said Industry Super public affairs director Matt Linden.
“In delaying the transfer of legacy super accounts, the banks potentially were again sneakily boosting their profits at the expense of the retirement incomes of ordinary Australians”.
“The not-for-profit industry funds, on the other hand, did the right thing, swiftly moving their members across to low fee products”.
Industry Super Australia used the news of ASIC’s investigation to criticise the Government’s superannuation legislation to require at least one-third independent directors and changing reporting requirements. Linen said the governance Bill would leave the retail super fund boards, “which oversaw the fee gouge”, virtually unchanged while disrupting industry funds.
“Furthermore, the bills seek to broaden choice to enable the banks to spruik their super products to even more unwary Australians without adequate disclosure and safeguards,” he said.
“Finally, the bills fail to legislate heightened trustee obligations and outcomes test for choice super products that account for 80 percent of assets in the retail super sector.”
Industry Super Australia is calling on the Government to withdraw its superannuation Bills, or otherwise for the Parliament to reject them.