Appearing at the House of Representatives standing committee on Friday, Mr Hartzer was questioned about the major bank’s superannuation offering through BT Financial.
Labor MP Matt Thistlethwaite asked the Westpac CEO about reports that employers could be prosecuted for the underperforming retail super funds that manage staff retirement savings.
Mr Thistlethwaite referred specifically to a 21 January news article in The Australian that noted Westpac’s BT super fund was one of the worst performing super funds in the last seven years.
“The article points to ‘bundled services’ for the business behaving employees in your BT retail fund. What are those bundled services?” the MP asked.
Mr Hartzer said he was not familiar with the news article.
“I’m assuming that bundled services means you provide concessions to the employer on other banking products for bringing them into BT’s fund?” Mr Thistlethwaite said.
Mr Hartzer replied: “We checked quite closely and that is not our practice. The corporate super that is offered up is meant to be on a competitive basis for the services provided. We don’t provide inducements in terms of banking.”
Concerns over the relationship between retail super funds and employers were raised by the Productivity Commission in its report into the superannuation sector. Released in January, the report recommended the creation of a ‘best in show’ list of funds for employees to choose from.
In December last year, The Australian reported that ASIC commissioner Danielle Press said the regulator would crack down on employers who placed employees in poor-performing funds in exchange for “bundled services” that were provided to them by the banks and finance companies that owned the funds.
“We’ve got to look at the role of employers in the default system and how they are making their decisions on what funds are their default funds,” Ms Press told The Australian.
“At the end of the day, consumers are disengaged. There’s no obligation on employers to make that default choice in the best interest of their employees.”
Please explain which BT Super Fund your are referring to. This must be a bundled retail super fund such as BT Super for Life and BT SuperWrap has no default option.
Ridiculous article to just say BT Super Fund. Typical journalist to only include half the facts to send the most negative message.
Worst super fund ? , just got my Vic super or Australian Super notice , admin fee going up 30% plus now ssssshhhh , i think its an industry fund , don’t tell anyone !!!!They are protected aren’t they , who else has put there admin super fee up 30% In the last month ? anybody else …
So disingenuous. An increased of [b]30%[/b] on $75 is $23 per year irrespective of balance. Retail funds charge admin fees on a percentage basis an increase of [b]0.5%[/b] on a $100k balance is $500 per year…
$75 plus $23 is 0.98% on a $10,000 balance. Plus the % based fees that the Industry Funds charge. Plus the Insurance they slug you with – REST will love the new KMart deal. What is your point?
[b]Have you had a look at the TOTAL fee reporting for some of these industry funds?
[/b]
Balanced / Core / Default funds –
TOTAL COSTS – i.e. ICR + Investment Fee + Property Operating Costs + Borrowing Costs
v
ADVERTISED Costs (just Headline ‘Investment Fee’ or ‘ICR Fee’)
Hostplus Total 1.40% v Headline ‘Investment Fee’ of 0.71%
CarePlus 1.20%
HESTA Core Pool 1.06% v Headline ‘Investment Fee’ of 0.73%
AustralianSuper 0.82% v Headline ‘Investment Fee’ of 0.66%
Some WIDE variation there!!!!
Why do you have multiple Industry super funds if you don’t like them?
That aside, are you suggesting that these two funds putting their fees up by about $30/yr is comparable to the nearly $2b worth of fees for no service rorts and poor super performance that has been overseen by the banks. Delusion is the word that comes to mind.
BT Wrap, or its various badged versions was for a long time the most expensive in the industry, total rip off and hard for any investor to make a buck. Add it into a SMSF ala Count Financial and you would be down about 50k over 5 years…
Yet there was badges of it that were 50%+ discounted
I think there BT Open pricings changed all that now though. I mean, I don’t think any of us get a discount anymore, it’s just all pretty cheap for the bells and whistles for even us smaller outfits / clients.
So if it was 50% dearer , why wouldn’t they reduce prices for everyone ? Oh hang on …. we need a really dear fund to compare in our SOA to say our fund we are recommending is cheaper than the that one , thats right .thanks BT wrap , please don’t reduce your standard PUBLISHED rates !!!!