The ACTU submission stated that the proposed changes will favour for-profit funds, as performance benchmarking is based on net investment return (NIR) rather than net benefits to members.

“Current benchmarking proposals exclude member administration fees, meaning the government proposals will be deliberately misleading workers into thinking they are members of a well-performing super fund,” the submission stated.

It also noted that if the proposals become law, from 1 July 2021, everyone with an existing superannuation fund will be stapled to their current fund.

“[This means] predatory for-profit funds will target first time bank openers to nominate a super account with them, locking them into a poor performing default fund for life,” it said.

ACTU assistant secretary Scott Connolly said a worker could be “locked into an underperforming for-profit fund that is funnelling money to shareholders through exorbitant administration fees – and be misled by the government that they are in a good fund”.

“It is no coincidence that administration fees are excluded from benchmark proposals, as for-profit funds performances will be overstated to members and potential members,” said Mr Connolly.

Mr Connolly said for-profit funds will have a systemic advantage over all-profit-to-member funds if the laws are passed.

“Despite the Banking Royal Commission finding for-profit funds blatantly rorting members, the Government continues to favour them by making benchmarking based on net investment return,” he said.

“The Federal Government’s reforms to superannuation will slash workers’ hard-won retirement savings and should be completely rejected.”