Union superannuation groups up the PR ante in banks war

The Australian, March 20, 2017:

Union-aligned industry super groups are attempting to get the public on side in their war with the banks over how default super­annuation funds are chosen, with a new ad campaign.

The “banks aren’t super” campaign aims to stir fears that the changes will reduce members’ super nest eggs.

It characterises the banks as foxes descending on a henhouse, and the Turnbull government, which has been pushing for the changes, as the ones opening the henhouse door.

In October 2015, the government accepted a recommendation from David Murray’s Financial System Inquiry for the intro­duction of a competitive tender process for employers allocating default funds to members.

Scott Morrison said industry funds were operating in a “closed shop” that was stifling competition and allowing fees to eat into retirement savings.

Retail super funds such as those owned by the major banks, which manage about $540 billion, want the rules changed as they believe they advantage industry funds, which manage about $440bn.

Industry Super Australia chief executive David Whiteley said the changes would benefit only the big banks and would “put at risk the long-term investment outperformance” of industry super.

“The banks want to replace the cost-efficient and high-performing not-for-profit model with cross-selling to consumers and by ­bundling business banking and super with employers,” Mr Whiteley said.

The industry believes the govern­ment will bring legislation to parliament to make the changes later this year.

The Minister for Revenue and ­Fin­ancial Services, Kelly O’Dwyer, has been spearheading the push for changes to super.

Apart from making changes to the ­default super, the government is also pushing for governance changes to require more inde­pendent directors, transparency rules to change what funds reveal about their investments, and changes to the restrictions in ­enterprise bargaining agreements.