APRA figures show annualised returns averaged just 2 per cent over the past five years.
NON-PROFIT and in-house corporate funds have topped an official list of Australia's best-performing super funds, well ahead of retail funds run by the big banks and wealth managers.
Figures from the Australian Prudential Regulation Authority yesterday tracking the hundreds of billions of dollars held in managed super funds, show annualised returns averaged just 2 per cent over the past five years.
But the performance improved when measured over the longer term, with returns averaging 5 per cent over eight years.
The APRA figures show that $346 billion worth of the country's superannuation savings are tied up in funds that have delivered below-average returns over the past five years.
Of the 50 funds to post the best returns between 2007 and 2011, 42 were not-for-profit or in-house corporate funds.
The best returns were led by stevedoring-linked fund CBH Superannuation, which posted five-year returns of 7.1 per cent. The Goldman Sachs JBWere staff fund, a consistent top performer, posted annual returns of 5.2 per cent.
Commonwealth Bank's staff fund came in third, returning 4.7 per cent over five years. The Reserve Bank's staff fund came in at fifth place, with 4.4 per cent.
The best-performing industry scheme was the Catholic Superannuation fund, with average returns of 4.1 per cent over five years.
Challenger Retirement Fund was the only retail fund to make the top 50, with an average rate of return of 4.5 per cent over the five years to 2011.
Among the poor performers, Motor Trades Superannuation Fund averaged a loss of 0.8 per cent over five years while the 4200-member LifeFocus retail superannuation fund posted minus 6.3 per cent over the same period.
The figures come as the Productivity Commission conducts a review of how default super funds are chosen for workers on award wages. At present, employers and unions decide on a default fund for staff, but retail funds have protested that the process is uncompetitive and lacks transparency.
The chief executive of Industry Super Network, David Whiteley, said yesterday the better performance of not-for-profit funds had ''obvious and profound'' implications for the debate over default funds.
''At the end of the day, maximising how much super the employee has when they retire is the principal objective of our compulsory system, and the system needs to ensure that employees who do not choose their own super fund are members of a
well-performing fund,'' Mr Whiteley said.