- The big banks. The changes currently before the Parliament dismantle the governance structure of successful not-for-profit funds including industry SuperFunds, while leaving untouched the underperforming bank-owned super funds. The changes to the default super system they are lobbying for could benefit the banks by increasing their share of the retirement savings of millions of Australians who don’t choose their own superfund. Market research has indicated that banks are offering employers’ business banking incentives for adopting one of their funds as the default fund, which in most circumstances is unlawful.
If the banks succeed in getting all these changes to the law, we think the losers are:
- Ordinary working people- Over 5 million Australian workers are members of Industry SuperFunds. Changes to the way Industry SuperFunds are run, and removing protections for the three quarters of Australians who join the default fund their employer has in place, risks the superior average performance which industry super fund members have historically benefited from. If the big banks get their way, more people could end up in a retail or bank-owned fund without realising the impact.
- Employers- Independent research shows that employers could face unnecessary and costly red tape costs without the current ‘filter’ for default funds, making it harder for them to choose a fund that is right for their staff.
- The economy- Not for profit super funds invest billions of dollars in the economy through infrastructure projects. Changes to super fund governance and to default fund protections will be likely to reduce the capacity of Industry SuperFunds to invest in large nation building projects critical to our economic growth.