The domination of industry super funds in the modern award system has left virtually no market for higher performing, lower fee funds, according to the Financial Services Council (FSC).
The statement comes after the FSC undertook an analysis of MySuper listings and found 88 per cent were made up union and employer-owned industry funds.
It also revealed 83 per cent of retail funds with Australian Prudential Regulation Authority (APRA)-approved MySuper products are completely excluded from the modern awards system.
“The concentration of industry funds in the modern award system, where retail funds are prevented from competing by law, means that more than two million consumers don’t get the benefit of full competition,” FSC CEO Sally Loane said.
“The exclusion of 83 per cent of retail funds from the default market by the industrial tribunal means that some of the lowest fee and highest performing MySuper products are prevented from competing with industry funds.”
Loane said the system is at odds with reform recommendations from the Murray Inquiry for competition in the default super market.
“The Government must move towards an open and competitive market where any APRA authorised MySuper product is free to compete,” she said.
