Super industry has 'blood on its hands' over retiree GFC losses THE head of Canberra's peak consultative body on its reforms to superannuation has made a withering attack on the super industry, saying there was "blood on our hands" in regards to the losses suffered by retirees during the global financial crisis. Paul Costello, former general manager of the government's Future Fund, said the industry's investment performance had failed to live up to its own standards. Funds had given their members "a bumpy ride over the last decade . . . to a destination that is far from proud." He said: "We have I think not . . . collectively given the consumers of our superannuation system an outcome they are entitled to expect." Retirees, in particular, had suffered during the market downturn because funds had not taken into account their sensitivity to risk and their need to keep generating an income from their savings. Many have not yet recovered those losses. "All of us have some blood on our hands," Mr Costello told an Association of Superannuation Funds of Australia function in Sydney yesterday. Mr Costello heads Canberra's peak consultative committee on its Stronger Super reforms, the centrepiece of which is its MySuper default super fund. The committee is expected to deliver its report on how the reforms should be implemented in the next few weeks. The median balanced super fund, which MySuper is designed to replace, has returned an average 4.65 per cent a year over the past 10 years according to Superratings, below the industry's target return of inflation plus 3 percentage points. Over three years, it has returned just 0.76 per cent a year. Mr Costello said in the past funds had been too concerned with protecting their businesses and preventing the defection of members to other funds rather than maximising savings. Funds had been reluctant to set investment strategies that put them too far outside the mainstream. There was "an unwillingness to think as creatively as we should, as courageously as we should." The period 2004-08, when equity markets rose sharply, was a time when "collectively we did very little with out portfolios," Mr Costello said. We all know the fear of failing unconventionally. Mr Costello foreshadowed he would propose to Canberra that MySuper funds be required to tell members what their returns are expected to be over 10 years and what level risk the fund would to take to achieve that return. Michael Dwyer, chief executive of industry fund First State Super, agreed that the industry could always do better, but noted Australia's super funds survived the GFC in better shape than other country's pension funds.