Liberal Senator Jane Hume (Image: AAP/Mick Tsikas)

The long history of the Liberal Party’s efforts to destroy industry superannuation funds suggests they’re usually ineffective, and at worst spectacularly counterprodutive.

Like when the Turnbull government included super funds in the banking royal commission expecting it to expose rorts by “union-controlled” industry funds but instead exposed how corrupt and criminal retail super funds were — leading to the mass exodus of the big banks from super.

The recent “Your Future, Your Super” reforms, originally designed to discredit industry super funds by skewing comparison benchmarks in favour of retail funds, are another case in point. This week has seen the release of the first fruits of the government’s benchmarking tool, with 13 MySuper funds deemed as underperformers.

The business press dutifully lined up to focus on the 13 underperformers who had been “named and shamed” — and completely missed the real story.

The 13 funds jointly manage $56 billion on behalf of 1.1 million members in the default product. That’s out of $900 billion in MySuper funds — so about 6% of funds were deemed “underperforming”, covering about 7% of members. And 84% passed. Out of the wider super sector — in which there’s $3.3 trillion under management — $56 billion is trivial.

The government would have been hoping that some big industry funds would have ended up on the list of underperformers — Hostplus, or REST, or CBUS, even AustralianSuper — but sadly they all produced stellar results in 2020-21 of about 20% returns to go with their long-term positions at the head of the super pack.

Instead, Superannuation Minister Jane Hume and her cronies had to settle for naming and shaming the mighty Labour Union Co-Operative — an industry fund with just $4.7 billion in funds — and the Australian Catholic Superannuation and Retirement Fund with $4.6 billion.

And, as always, the Liberals’ plan backfired, because the list is dominated by retail fund BT, with nearly 550,000 members and more than $15 billion in funds, followed by Colonial First State, with more than 230,000 members and $9.2 billion in funds. Without the two retail fund giants, the list of underperformers accounts for about 3% of MySuper members.

It would be good for the relatively small number of industry super funds — there are now just 33 — to consolidate further, with smaller funds joining with the giants to ensure all members enjoy strong returns. But we already knew that — although it may not be too long before the Liberals decide that consolidation, which will increase the power of industry fund giants even further, isn’t such a good idea after all.

The trick is to compel the 93 retail funds to lift their performance to match industry super funds. But we already knew that as well.

As it stands, well over 90% of members know their funds are being managed satisfactorily. If only taxpayers could have the same assurance about the government.