Are the big four banks gouging your superannuation?
Superannuation funds owned by the big four banks are increasing their own revenue by hundreds of millions of dollars by paying out cash returns to customers at less than a quarter of the market rates.
According to internal industry data by analyst SuperRatings, obtained by The Australian, people with the Westpac-owned BT Business Super Fund who chose the low risk cash options were receiving a return of just 0.05 per cent a year.
The average cash rate and bond yield in the last two years is 2.03% and 2.48% respectively.
A systemic culture of price gouging by the big four banks and their superannuation companies were to blame for the poor performance of the funds, industry experts told The Australian.
Figures released by the Prudential Regulation Authority found that 95 percent of retail super funds had not delivered returns above the median for the past 10 years.
The big four banks deny claims of price gouging, pointing out that comparing their super funds with others was akin to comparing “apples and oranges”.
Analysts say that returns on cash should be higher than what is being paid out by the big four's superannuation funds, as the big four banks had the capital to invest and get better rates.
Australian Association of Superannuation Funds figure show that superannuation funds owned by the big four banks manage a total of $309 billion worth of funds.