APRA released its interim report on the performance of 116 MySuper products this week.
Industry fund lobby group AIST pointed to the disparity between the 116 products as highlighting the need for independent default fund selection.
“The APRA data shows that among the 116 MySuper products, annual member fees and costs (for a balance of $50,000) range from $265 to more than $1,300,” said a statement by AIST.
AIST executive general manager of policy David Haynes said the disparity raises concerns that “not all MySuper products may be suitable as default funds”.
“This data confirms that employers will need help in making the right choice about their default super provider,” Mr Haynes said.
The Financial Services Council, which represents retail funds, was quick point out that its members’ funds have outperformed industry funds since January 2014.
“FSC members’ funds averaged net returns of 3.4 per cent compared to industry funds at 3.18 per cent since the commencement of MySuper,” said an FSC statement.
“This is evidence that MySuper is delivering both transparent, comparable information and lower fees,” FSC director of policy Andrew Bragg said.
“This is good news for 70 per cent of working Australians who do not choose a superannuation fund,” he said.
“Fees can be further reduced if the industry fund-dominated default superannuation market is opened up to competition,” Mr Bragg added.
Industry Super Australia (ISA) argued that the APRA statistics show that the major banks have been slow to move members into MySuper funds.
“The APRA report confirms that just $13 billion of savings in bank-owned and other retail funds has been transferred to MySuper funds,” said an ISA statement.
“Seventy-seven billion dollars of workers default super savings remaining in higher cost super funds so that banks can maximise revenues at the expense of Australians retiement nest eggs. This is unconscionable,” said the ISA.
But APRA member Hellen Rowell cautioned against jumping to conclusions about the data, which only spans 12 months.
“Users of the statistics should of course remember that long term performance is the key determinant of members’ retirement outcomes,” Ms Rowell said.
“As such, we recommend users exercise caution in drawing conclusions based on this interim performance data, which covers just four quarters,” she said.
