The report, by the McKell Institute, compares performance over the period 1987 to 2013 and finds that “an Australian could have to contribute to their super for a further eight years had they been a member of an average retail super fund”, says Industry Super Australia (ISA).
Of course, as ISA points out that “past performance is not a reliable indication of future performance and it should never be the sole factor when selecting a fund”.
ISA Chief Executive, David Whiteley, used the new research to argue for a “default super safety net to ensure that only the best performing super funds are default funds”:
“With eight in ten Australians not choosing their own super fund there needs to be a default super safety net that ensures only the very best performing funds over the long term can be default funds.”
ISA reiterated its concerns over the link between retail super funds and the banks, saying “bank-owned super funds are seeking to abolish the safety net and intend to cross-sell their super funds by leveraging existing business banking relationships”.
“In the long run, the only logical solution is to prohibit banks or related entities from providing default super fund services to employees where the bank is the main banking provider to the employer” said Mr Whiteley.
This is the latest move in the fight over the selection of default super funds, which is unfortunate, as the research appears to be a thoughtful consideration of the governance structures of retail and industry super funds.
The full report is available here (PDF).
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