Industry Super Australia says super fund members could see a fall in investment returns if the dominance of the big four banks in banking is replicated in the superannuation sector.
ISA draws a connection between the banking market share of the major banks, which has grown from 66% in 1990 to 80% in 2016, according to an analysis of APRA data, and their plans for superannuation.
“The finding comes as bank lobbying to secure greater access to the super sector, under a ‘choice and competition’ catch-cry, intensifies,” said ISA.
“Desperate to fuel further growth in profits, the banks are lobbying hard to remove the laws that protect workers who don’t choose their own fund and thus save through the default super system,” said Industry Super chief executive David Whiteley.
“This would remove consumer safeguards and supercharge cross-selling of bank and super products, and the bundling up of employers’ business banking with workers’ default super,” he said.
“Past returns suggest bank domination of the super sector could leave millions of Australians facing the grim choice of working longer or retiring with less.”
This is the latest release of research and analysis by Industry Super Australia aimed at the banks in recent weeks. The organisation has recently released a poll which found 70% of Australians think all super funds should be run on not-for-profit basis, released research that the super funds of bank staff are outperforming the funds the banks are selling to customers and said the call for choice and competition means more cross-selling and bundling.
The Productivity Commission is due to release its draft report into alternative models for selecting default superannuation funds in March.