The banking regulator has admitted it does not know what profits Australia’s major banks are making from their superannuation products.
Australian Prudential Regulation Authority (Apra) officials say their superannuation data collection does not require separate reporting of profit earned by bank-owned groups from their super funds and products.
It means they do not know to what extent profit-making is affecting the financial returns of members of for-profit super funds.
Helen Rowell, Apra deputy chairman, was asked during Senate estimates in March if she knew how much profit had been earned from superannuation products by Australia’s major banks in the last financial year.
Rowell said she did not, and took the question on notice.
Apra officials said the major banks’ public financial statements are “the most reliable source” in obtaining an overall picture of revenue and profit from their super products, but the statements still do not help to accurately attribute profit to banks’ super funds and products.
They also say they are more focused on assessing the performance of super entity licensees in delivering outcomes for their members.
“This encompasses not just investment returns, but also includes factors such as fees and costs, insurance, services and governance of the RSE licensee,” they say.
According to Apra, over the past 20 years, not-for-profit super funds have generated average returns for their members of 6.6%, while retail funds have generated returns of 4.5%.
David Whiteley, the chief executive of Industry Super Australia, said it was “clearly” in the public interest that the banks’ disclose the profits they are making from compulsory super.
“This could be disclosed to members on their statements, it could be disclosed in their financial reports, or to Apra,” he told Guardian Australia. “It’s in the public interest that people understand if there is a trade-off between bank profits and members’ returns.
“If there is a trade-off, don’t members have a right to know how much this is reducing their super balance?”
Last month, ISA launched a new advertising campaign attacking Australia’s major banks, warning workers about the banks’ lobbying efforts in Canberra.
A recent poll, commissioned by Industry Super, found just 31% of Australians trusted the views of the big four banks – NAB, Commonwealth, Westpac and ANZ – on super, compared with 69% who trusted industry super funds.
