Droves make super switch

AUSTRALIANS fed up with being gouged by their super funds are switching to help fatten their savings.

Some of the country’s largest industry super funds including AustralianSuper and Hostplus have reported strong inflows of new customers shifting from retail super funds.

It comes amid the latest round of the financial services Royal Commission hearings which could lead to criminal charges against the Commonwealth Bank and National Australia Bank over the way they have treated members.

This includes fee-for-no-service, not acting in their best interests and poor performance.

Industry sources have told News Corp of large companies looking to exit agreements they have where their employees default to a retail super fund.

Retail super funds return their profits to shareholders and investors whereas industry super funds generally return profits to their members.

AustralianSuper’s group executive Paul Schroder said in recent months they had seen an increase in new members, adding to their 2.2 million member accounts.

Another one of the country’s biggest industry funds, Hostplus, also said they had seen a large influx of new members moving from retail funds.

“Hostplus has seen very strong net inflows of members and funds under management from the retail super sector over the past 12 months,” the spokesman said.

Latest Australian Prudential Regulation Authority statistics show industry funds have overtaken retail funds for the first time in asset sizes.

Industry funds had $631.6 billion in assets at the end of June, an increase of 16.3 per cent over 12 months.

This compares to retail funds at $622.3 billion which increased by 5.8 per cent.

The Australian Institute of Superannuation Trustees chief executive officer Eva Scheerlinck said she was not surprised by employers reconsidering their default fund arrangements with retail super funds.

“Most employers want to do the right thing by their staff,” she said.