Australians are changing superannuation funds to save cash

AUSTRALIANS fed up with being unfairly gouged by their super funds are switching funds to help fatten their savings. This is where they’re going.

EXCLUSIVE: Australians fed up with being unfairly gouged by their super funds are taking action and switching to help fatten their savings.

Some of the country’s largest industry super funds including AustralianSuper and Hostplus have reported strong inflows of new customers shifting across from retail super funds.

It comes amid the latest round of the financial services Royal Commission hearings which could lead to criminal charges against the Commonwealth Bank and National Australia Bank over the way they have treated members.

This includes fee-for-no-service and not acting in their best interests and poor performance.

Industry sources have told News Corp of large companies looking to exit agreements they have where their employees default to a retail super fund.

MORE: Are you missing out on superannuation?

Australians are switching from retail industry funds to industry super funds.

Retail super funds return their profits to shareholders and investors whereas industry super funds generally return profits to their members.

AustralianSuper’s group executive Paul Schroder said in recent months they have seen an increase in new members, adding to their 2.2 million member accounts.

“This increase in people taking greater charge of their retirement savings has been seen through increased contact with the fund via the mobile app, website and phone,’’ he said.

Another one of the country’s biggest industry funds, Hostplus also said that have seen a large influx of new members moving over from retail funds.

“Hostplus has seen very strong net inflows of members and funds under management from the retail super sector over the past 12 months,” the spokesman said.

“Over the past few months we have also seen increased engagement from employers who currently hold default status with retail funds looking to transition across to Hostplus.”

There has been a large influx of new members moving over from retail funds to industry funds.

Latest Australian Prudential Regulation Authority statistics show industry funds have overtook retail funds for the first time in asset sizes.

Industry funds had $631.6 billion in assets at the end of June, an increase of 16.3 per cent over 12 month.

This compares to retail funds at $622.3 billion which increased by 5.8 per cent.

The Australian Institute of Superannuation Trustees’ chief executive officer Eva Scheerlinck said she was not surprised by employers reconsidering their default fund arrangements with retail super funds.

“We know most employers want to do the right thing by their staff,” she said

“The right thing for these people is for their super to be directed into a high performing not-for-profit super fund, which all the evidence shows are delivering the best retirement outcomes.”

@sophieelsworth