Even in a sector where the community is notoriously disengaged, alarm bells should be ringing, and loudly. The retail super sector has been exposed by the financial services royal commission as far more corrupted and inimical to its customers’ interests than even industry super funds claimed it was. Australians still with their funds in retail super should be urgently seeking to satisfy themselves that the extraordinary revelations of this week aren’t also occurring in their own funds, or getting out.

Until the royal commission, an unbiased and informed observer would have been aware that the vertical integration model created major conflicts for both financial planners and retail funds themselves, that retail funds significantly underperformed corporate funds, industry funds and self-managed super funds, and — if they were a long-term Crikey reader — that there was disturbing evidence of an issue around related party transactions that had gone uninvestigated.

After this week, it’s clear things are much, much worse in funds run by NAB, CBA, AMP and IOOF.

Underperformance was so bad at one AMP fund that members actually went backwards after fees — a fact that wasn’t apparent to the trustee, who found that out from APRA. The trustee only learnt in the witness box this week that many fees charged by AMP-related entities weren’t documented at all — they were legacy fees simply left to chew up members’ money. The trustee in fact was wholly reliant on “service providers” (all related parties) for information about what was being charged, and performance — and certainly had no power to prevent overcharging by related parties. IOOF’s trustee was actually paying a related entity for services it undertook itself. Funds took so long to move superannuation accounts into lower-fee MySuper that they broke the law tens of thousands of times. NAB’s superannuation trustee didn’t seem particularly concerned about account holders being charged fees for services they never received and waited for NAB to work out whether it could devise a way to keep the money. The same trustee professed that it never occurred to her that it might be better for account holders if they weren’t charged commissions.

According to ASIC, which along with APRA seems to have “regulated” the entire shemozzle with the attitude of an indulgent uncle, the cost of compensation for fees for no service across the industry is heading toward $850 million. Put in blunter terms, that is $850 million the big banks, AMP and others have stolen from Australians. That includes the apparently ubiquitous charging of service fees of dead people. Which NAB wanted to keep doing.

The only reason we’re hearing this, by the way, is that the government thought it was being awfully clever in lumping super into the banking royal commission to have a crack at industry super. In its own way, that has to be one of the most spectacular own goals of a government that has made an artform of booting the ball in the wrong direction. If the Liberals had a shred of decency, they’d formally apologise to Australians for protecting retail super and the big banks for so long; for opposing FOFA — and thus helping to ensure it got further watered down during its passage — and for trying to repeal it. In doing so, the Liberals were handmaidens to what is now revealed as one of the most corrupted, exploitative and damaging sectors of the entire economy, organised crime on a colossal scale.

Or maybe instead of an apology, the government could do something that would go some way toward addressing this disaster: compensate current and former retail super fund members with an annual payment into their super accounts. A few hundred dollars a year, say. How to pay for it? Slug the big banks, AMP, IOOF and other conflicted owners of retail super funds an additional levy on profits. At least then their victims can start catching up with where they should have been financially but for the depredations of these criminals.