Member-based industry super funds clear winner for consumers

Patricia Babalis

Patricia Babalis

( 3 min read )

The latest data from the Australian Prudential Regulation Authority has confirmed that not-for-profit industry super funds continue to deliver the highest returns to members.

The data spans the past 11 years and confirms that, on average, industry super funds beat out retail funds on net returns by 6.77% to 4.83%.

The key to such successful returns for customers is in the culture of the fund says Robbie Campo, Deputy Chief Executive of Industry Super Australia.

“The superior performance of industry super funds relies on a member-focused philosophy. There is little doubt that this outperformance is driven by the culture and character of industry super funds and their boards,” said Mr Campo.

Mr Campo also argues that the success of industry super funds is reason to maintain the industry’s current governance structures which have been slated to change as part of the Federal Government’s response to the Financial Systems Inquiry.

In the published response, the government proposed to “improve governance in superannuation by requiring a minimum one-third of independent directors for superannuation trustee boards.” The idea behind the move is to improve transparency and competition in the industry, with the “Trustee Governance” bill currently before the Senate.

“The proposed changes to the governance structures of industry and other not-for-profit super funds, currently before the Federal Parliament, would impose significant and costly changes to the super industry’s best performing governance model,” said Mr Campo.

In parliament a number of senators have come out against the bill stating that there is no need for changes with the current governance model returning the best results for customers.

Senator John Madigan said, “While, like any institution, industry super funds are far from perfect, it seems the government has the wrong target in its sights.

“Over the past 11 years they [industry super funds] have made up 47 of the top 50 performing funds, offering almost two per cent better returns than retail funds with a member on an average wage of $70,000 a year likely to be left $200,000 better off upon retirement.”

It remains to be seen if the bill will be passed and what the flow on effect could be for customers but for the present the strong performance of industry super funds is a well-established fact.

To compare your super fund’s performance visit the RateCity super comparison page.  

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