Australians pay $31 billion in super fees each year
Banks alone are responsible for nearly $9 billion worth of these superannuation fees.
A new report commissioned by Industry Super Australia reveals the superannuation industry ranked in $31 billion in fees from Australians in 2016.
Of this $31 billion, over half ($15.5 billion) was collected by the retail sector which includes the banks. This is despite the retail sector only managing 29% of Australia’s $2.2 trillion superannuation funds, according to the analysis by Rainmaker Information.
Banks alone are ranking in $8.7 billion worth of these fees annually. This is in comparison to the not-for-profit sector which collected $13 billion in fees while managing a huge 42% of the superannuation industry.
However, despite charging more fees, the bank-owned super funds have been seen to under perform. Industry super funds have outperformed bank-owned retail funds by more than 2% over the last decade, according to recent SuperRatings research.
Industry Super Australia estimates that for an average income earner, this under-performance by the bank-owner super funds could cost $200,000 in retirement savings if continued.
Industry Super Australia chief executive David Whiteley has called on the government to take action against the banks and their unprecedented superannuation profits.
"Super cannot be a honeypot for Australia's scandal prone banks,” said Whiteley.
“It’s time the major banks clearly disclose the profits they generate from compulsory super to their customers, shareholders and the general public.”
“The government and regulator need to find out if the bank-owned super funds are eroding workers’ super savings by generating profits for the parent bank.”
There has been an ongoing battle in recent months as the industry super sector battles the banks on their attempts to gain greater access to the super sector.
In March, Industry Super Australia launched an aggressive campaign warning consumers to keep bank "foxes" out of the hen house via a 30-second television ad, with the tagline "banks aren’t super".