Super funds need more focus

Because working-age Australians are obliged by law to deposit money into super every payday, perhaps superannuation fund board members and their managers forget they have to answer to their investors. Certainly, Labor politicians, past and present, and their mates at the top of the union movement who sit on super boards appear to think they know best. That cannot be – complacency and other people’s cash never ends well.

Whatever is worrying Home Affairs Minister Tony Burke just now, it does not appear to be the safety of the billions of dollars millions of Australians have in their superannuation accounts, including those overseen by Labor mates. In the aftermath of criminals laying cybersiege to people’s ill-defended super savings, Mr Burke said funds are doing a good job, that four people had lost money, and “there has been a process for them to have their funds reinstated”. So that is all right then. No, it’s not – as Jared Lynch reports, one of the people robbed had $400,000 remediated by AustralianSuper only after this masthead made inquiries.

This might seem surprising indifference from staff of a fund chaired by that self-declared friend of ordinary Australians, ACTU president Michele O’Neil. Not to anybody who has paid attention to the recent customer performance of some union-linked funds with longstanding Labor connections. Like CFMEU-linked Cbus, chaired by former Labor treasurer Wayne Swan, which took 12 months to deal with death and disability claims relating to 10,000 members. And like the two million-member Retail Employees Superannuation Trust, chaired by James Merlino, formally Labor deputy premier of Victoria. As recently reported in The Australian, REST deducted insurance coverage from members who had either cancelled or never had it. It took six months for the mistake to be found and then REST told members they had to cancel the product to get their money back.

Certainly, private funds are not a consistent cut above the comrades, and what were industry-specific ones are now open to all-comers, but those founded for union members still pitch themselves as providing a better, worker-friendly product. Their “compare the pair” marketing campaign states “industry funds return profits to members, whereas retail funds are usually large companies who may return some of their profits to their shareholders”.

This does not get union-linked funds off the hook for an industry-wide complacency. It was demonstrated by Mary Delahunty, chief executive of the super funds association, who said this week her members are “some of the safest places in the country to have your money”. With regular warnings of inadequate defences, this is an assumption that sooner rather than later they will be tested by a cyber attack of a scope that overwhelmed Optus and Medibank. All super funds need to demonstrate they have defences in place to stop something similar happening to them.