According to the new report, billions of dollars are being extorted from workers' retirement savings in order to pay for the advice which usually does not reaches them.

The cut throat competition in the market has enabled people to look for the best value at the best price. But when it comes to superannuation, this notion fails to work altogether.

The Chief Executive of the Industry Super Network, David Whiteley says, "For every 1 per cent extra paid in fees to a super fund, members are receiving one-and-a-half per cent less in returns. The economics of super don't work in the way we typically expect competition to work".

The Industry Super Network will be releasing "Supernomics" today, which is a new report that unveils the fact that the choice in super laws have failed to bring any reform through competition.

According to David Whiteley, there are three primary causes of market failure within the super system. Firstly, the people do not actively participate in their superannuation. Secondly, Australians are not financially literate people and thus they fail to understand complex things.

The last, but not the least, problem is that to get a financial advice, they go to a financial planner who misguides them by offering them a costly retail fund.