Federal government’s war on industry super set to continue

Industry superannuation funds have consistently outperformed their retail competitors but the new Minister for Superannuation Jane Hume still has them in her sights.

According to the ratings agency Superratings, industry super funds occupied the top ten places in performance over 2017–18 and nearly all of the top 20 places.

Retail funds – predominantly owned by banks – had none in the top 10, three in the top 20 and 15 in the top 50.

Online news site Crikey described the industry super dominance as “an open embarrassment to business”.

Yet, the new federal Minister for Superannuation Jane Hume has been clear in her determination to “reform” the sector and advocating for the imposition of retail fund-style governance on the industry sector.

In a 2017 speech, Hume argued that the existing industry super governance model, which has delivered returns for members far greater than retail super, was “entirely irrelevant; it is a legacy of the past”.

It needed to be replaced with the retail super fund governance model of independent directors, she said.

The Treasurer Josh Frydenberg also flagged after the federal election that the government wanted to pursue its review of superannuation “including a strong case for reform to strengthen accountability and governance”.

Crikey pointed out how the banks’ retail model, championed by the government, was “exposed by the Hayne royal commission as profoundly inadequate in protecting members’ interests”.

Despite this, “the Liberal (party) determination to attack industry super remains steadfast,” it said.