| 16.07,09. 04:12 AM |
Industry super 'better for workers'
AAP July 16, 2009 12:11AM
IT'S been a tough couple of years for superannuation members, but new research suggests workers with an industry fund account are still better off than being in a retail fund.
Default option accounts in industry funds have now outperformed equivalent retail funds for 20 quarters in a row, and by 2.3 per cent on average, superannuation research firm Rainmaker Information says.
Industry Super Network executive manager David Whitely said the research vindicated the decision by the Australian Industrial Relations Commission late last year that employers should stick with existing industry default funds under new award schemes from January 1, 2010.
"Nine in ten Australians rely on the default fund at the workplace," Mr Whitely said releasing the research.
"The Rainmaker research demonstrates why industry super funds are the most appropriate vehicle for workplace default funds."
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Rainmaker found that over five years, industry super fund default options averaged 4.6 per cent per annum, more than double that of retail master trusts which achieved 2.1 per cent.
The study of 100 super funds found that up to March 31 this year, an average industry fund member with a default option earned more than the average retail fund member: $1899 over one year, $5219 over three years, and $8406 over five years.
The results also found that workers opting for a growth option within an industry super fund were also gaining an advantage over a retail fund.
Rainmaker calculates the outperformance was $3625 for one year, $9722 for three years and $16,777 over five years.
Mr Whitely said they reinforced the over-riding principle that net performance should be the key determinant in selecting a workplace default fund.
It also substantiated the need to prohibit the 'flipping' of workers from workplace place funds to personal retail fund divisions when someone left their employer.
"This evidence once again shows the need for effective regulation to protect workers superannuation savings from high fees, sales commissions and conflicts of interest," he said.