Industry Super Australia (ISA) has come out swinging against the big banks, saying new data from the Australian Prudential Regulation Authority (APRA) shows why the big banks are pushing to scrap the default super safety net.
ISA said the APRA report shows that just $13 billion of savings in bank-owned and other retail funds have moved into MySuper funds, with "$77 billion of workers default super savings remaining in higher cost super funds so that banks can maximise revenues at the expense of Australian retirement nest eggs".
"This is unconscionable. The banks are lobbying the government to scrap the default super safety net so they can leverage their business banking relationships and cross-sell employee default funds to employers," ISA said in a statement.
Industry fund peak body the Australian Institute of Superannuation Trustees (AIST) called for an independent body to select default funds from the MySuper pool, saying not all MySuper products are apt for default funds.
It said the APRA data showed that out of $359 billion of savings in MySuper products, most of this is invested in industry funds.
Executive manager of policy David Haynes said the APRA data showed huge differences in fees, target returns, product type and costs across MySuper.
APRA data showed annual member fees and costs across 116 MySuper products vary from $265 to more than $1300 for a $50,000 balance.
"While generally speaking the fees in the MySuper space are lower than elsewhere, it is also clear there are some high-cost products," Haynes said.
AIST recently urged the Government to bring forward the release of non-MySuper default savings, which is mostly held in bank-owned super funds, into MySuper products.
On the other side is the Financial Services Council (FSC), which claimed the average MySuper fund its members offer has outdone its industry fund counterparts.
The FSC did not say how many funds it looked at but said they were of comparable types and sizes, and held substantial market share.
APRA member Helen Rowell warned against jumping to conclusions by looking at this interim performance data that only looks at four quarters.