Thanks to a massive multi-million dollar advertising campaign run over more than a decade, the industry fund concept is pretty well understood. Generally, these funds have had lower fees and higher investment returns to members because they don’t have external shareholders. Basically, all the profits flow back to members.
Those claims have been validated by the recent Productivity Commission into the competitiveness of the superannuation industry. It found that industry funds had consistently outperformed retail funds. According to Rice Warner chief executive Michael Rice, retail funds provide a “relatively poor product offering compared to the large industry funds.”
So is Equip an Industry Fund?
The short answer is yes. The slightly longer answer is also yes – but we prefer to call ourselves a profit-to-member fund.
The reality is that the terms ‘industry fund’ and ‘profit-to-member fund’ mean broadly the same thing. Both are member focused, and have a history of delivering higher returns to members than their retail counterparts.
The difference between the two terms is mostly historical. For example, Equip was founded in 1931, and was originally a fund for public service employees of the State Electricity Commission of Victoria (SECV).
‘Industry funds’ evolved from the Hawke-Keating government’s industrial deal in 1980s , The Accord, as a partnership between trade unions and employers in specific industry sectors.
This table may help explain where Equip, as a profit-to-member fund, compares with industry and retail funds (often owned by banks):
