New research commissioned by Industry Super Australia (ISA) has found the big four banks are offering employers benefits to switch their default superannuation funds.
The ISA survey of 550 small and medium-sized businesses, conducted by UMR, found 26 per cent said a major bank had approached them about transferring their employees’ default superannuation to a bank-owned retail super fund in the past year.
The research comes after ISA chief executive David Whiteley told InvestorDaily the banks are looking to "scrap" the current default super selection process in order to take a greater share of the market.
The survey also pointed out that of those who had been approached, “just under half” said their bank offered them benefits to change funds.
“The most common offers made by the banks involved a direct benefit to the business rather than employees, such as discounts on business banking and insurance products. Some employers report being offered tickets to sporting events.
“[Thirty-three per cent] of employers offered benefits say they were persuaded to switch to a super fund promoted by their bank, and many more (57 per cent) report that they are still considering switching,” a statement from ISA said.
Commenting on the findings, Mr Whiteley said it gives rise to “serious questions” about the banks’ behaviour
“It appears they are approaching employers and offering deals to bundle business banking services with employee default superannuation,” Mr Whiteley said.
"This could result in employees’ super contributions being paid into bank-owned super funds, which have on average historically produced lower net returns to their members.
“In the best interests of employees, the law should be changed to prohibit a bank-owned super fund from providing default super services where it is also the provider of business banking services to the employer,“ he said.
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