Industry fund titan reaps benefit as super switched from banks

BILLIONS of dollars is being shifted from bank-owned superannuation funds and finding its way to the nation’s biggest industry fund.

AUSTRALIANS angered by misconduct at bank-owned superannuation funds are swarming into the not-for-profit sector, new figures indicate, ploughing billions more dollars into the nation’s biggest industry fund.

Adding to evidence of a widespread flight from bank-owned funds, AustralianSuper has revealed its inflows have grown at breakneck speed.

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Over the past six months, contributions to the fund are almost 50 per cent higher than in the same period last year.

Spokesman Stephen McMahon said there had been a rise in member contributions since hearings for the financial services royal commission started in March.

In the past six months, the fund has received inflows of $6.79 billion, compared with $4.6 billion for the same period a year ago.

The revelation comes ahead of the expected release tomorrow of the interim report for the royal commission.

AustralianSuper spokesman Stephen McMahon.

It will outline findings from the first four rounds of hearings, where startling cases of misconduct were laid bare.

With about 2.2 million members and $140 billion under management, AustralianSuper is the nation’s biggest retirement fund.

Most of the extra cash came from members moving from retail super funds — those run for profit by banks and other financial services companies — although some people were also tipping more money into their accounts, the fund said.

In July, there were $1.3 billion of inflows, compared with $655 million in the same month last year.

Inflows in August were $1.27 billion — more than double the $601 million a year earlier. The September tally is already double that of last year.

So far this year, inflows stand at $9.3 billion, compared with $8.1 billion for the same period last year.

The royal commission in August examined a series of scandals in the super sector, but industry funds were largely unscathed.

It heard the Commonwealth Bank kept about 15,000 super customers in higher-fee funds beyond a mandatory deadline to transfer them to low-fee MySuper funds.

Super savings are being shifted from bank-managed funds at an extraordinary rate.

National Australia Bank was accused of breaking the law by charging fees for services it did not provide in a scandal labelled “serious and systemic” by corporate watchdog the Australian Securities and Investments Commission.

Mr McMahon said: “The inflows from members into AustralianSuper for every month this year have exceeded the same time the previous year.”

Separately yesterday, National Australia Bank chair Ken Henry moved to back the group’s chief executive, Andrew Thorburn, following criticism levelled at the bank during commission hearings.

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Mr Thorburn “very much shares my and the whole NAB board’s perspective” of the need to restore trust in the industry, Mr Henry said, speaking in Sydney.

NAB announced this month chief consumer and wealth customer officer Andrew Hagger was leaving as part of a broader shake-up. Mr Hagger had been a key witness at the royal commission and faced intense scrutiny, particularly over how much he shared with ASIC over the fee-for-no-service scandal.

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