Industry super funds hailed a 'success story'
Industry Super Network chief executive David Whiteley said industry funds - with equal board representation for employers and employees - were a "fine example of the consensus upon which this nation is built".
Further, they have "outperformed their retail fund rivals, largely the major banks, by between 1 and 2 per cent per year on average over the past 10 years," Mr Whiteley told a Sydney audience on Thursday.
"This is attributed to their non-commissions, low fees, all profits to members' model, and also asset allocation, principally investment in unlisted property and infrastructure."
Australia's total superannuation assets are estimated to have grown by 13.5 per cent over the year to March 31 to $1.58 trillion. Industry super funds account for 19.8 per cent of total assets, "retail funds" run by banks had 26.3 per cent, and the largest group was self-managed funds, with 31.5 per cent.
The network said industry super funds could invest $15 billion over the next five years into infrastructure, providing state governments with much-needed money and matching super's long-term focus with the country's growing infrastructure needs.
But despite super's growth, Brad Cooper, the head of Westpac's wealth arm BT Financial Group, said just 20 per cent of retirees would be fully self-sufficient in 2035 - about the same ratio as now.
"In fact, what grows is the proportion of people who will be partially self-funded but still relying on the pension," he told a Melbourne function this month.
Mr Whiteley also stepped up the rhetoric against further changes to super, fresh from the Coalition's announcement that if it wins the next election, it would defer the rise in the compulsory super guarantee to 12 per cent by two years.
"In the not too distant future people will pay as much attention to superannuation policy changes as they might to announcements on interest rates by the RBA," he said.
"There are very real concerns that policy makers will realise too late that iterative change could create permanent damage to confidence in the system,"he said.
Frequently Asked Questions about this Article…
Industry super funds are member-focused superannuation funds with equal board representation for employers and employees. Industry Super Network chief executive David Whiteley called them a “great Australian success story” because they have delivered strong member outcomes through low fees, no commissions, returning profits to members and investment strategies (including unlisted property and infrastructure) that have helped them outperform rivals.
According to Industry Super Network, industry super funds have outperformed retail funds (largely run by major banks) by around 1–2% per year on average over the past 10 years, a gap attributed to lower fees, no commission structures and different asset allocation choices.
Australia’s total superannuation assets were estimated to have grown 13.5% to $1.58 trillion to March 31. Industry super funds held about 19.8% of total assets, retail bank-run funds about 26.3%, and self-managed super funds (SMSFs) were the largest group with about 31.5%.
Lower fees mean less of your savings are eaten by costs, so more returns are retained for members over time. The article notes industry funds’ non-commission models, low fees and returning profits to members as key reasons they have achieved stronger long-term performance compared with some retail competitors.
Yes — the network said industry super funds could invest about $15 billion over the next five years into infrastructure. For investors, this can offer exposure to long-term assets aligned with super’s long investment horizon, while providing state governments with funding for projects that may generate stable returns.
The Coalition announced it would defer the rise in the compulsory super guarantee to 12% by two years if it wins the next election. Delaying the increase could slow the growth of compulsory employer contributions for savers, which is why industry representatives warn policy changes can affect confidence in the system.
No — Brad Cooper, head of Westpac’s BT Financial Group, said only about 20% of retirees would be fully self-sufficient in 2035, roughly the same proportion as now. He expects a larger share will be partially self-funded but still rely on the pension.
Board composition matters because it influences governance and whose interests are prioritised. Industry funds feature equal employer and employee representation, a model praised in the article for delivering consensus decisions. The piece also notes an expected focus on super board composition under a Coalition government, and warns that frequent policy changes can harm confidence in the system.
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