Banks incapable of acting in member’s best interests
“For profit” superannuation funds, particularly those owned by the banks, should not be eligible to be default funds, according to key industry fund covering the nursing and health sector, HESTA.
HESTA has used its submission to the Productivity Commission inquiry into superannuation industry competition and efficiency to argue for the exclusion of profit-driven superannuation funds because such an approach means then cannot be trusted to act in member’s best interests.
“HESTA believes that in a mature retirement system, businesses should not be able to profit from unengaged consumers and inert money, therefore profit seeking funds should be excluded from the safety net considerations,” the submission said.
“It is impossible to contemplate this important overarching criteria ever being met by profit-seeking funds in a mature system,” it said.
“HESTA recommends that the commission should strongly consider the appropriateness of these businesses being allowed to compete for the provision of a safety net fund at all and we believe the filter should reflect this.”
The industry funds submission claimed: “member’s best interest cannot truly be met by entities such as banks who seek to use inert money from unengaged consumers to build profits through their vertically integrated businesses”.
“Member’s best interest is the most important criteria to be considered when assessing the role of safety net fund providers,” the HESTA submission said. “Profit seeking funds have continually acted contrary to this objective.”
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