Colonial First State has admitted to failing to move thousands of members from high-fee super funds into the low-fee MySuper regime by a government deadline, meaning it committed more than 15,000 offences.

Suncorp admitted to waiting until the last minute before transferring its eligible members, with the delay boosting its profits at members’ expense.

The banking royal commission heard evidence on Tuesday of the response of retail super funds to the federal government’s introduction of the low-fee MySuper regime in 2014.

The MySuper regime was introduced to sort out the mess of super customers owning multiple super accounts, and multiple insurance policies, with multiple high fees eroding their retirement savings.

After 1 January 2014, super members who wanted to use their fund’s default fund, or who did not want to make active investment choices, had to have their super placed in a low-cost MySuper fund.

But the industry was also given a deadline of 1 July, 2017 to transfer existing balances of default members onto the low-cost MySuper platform, which threatened to see the loss of lucrative trailing commissions and other fees attached to high-cost and inactive funds.

The royal commission heard that Suncorp waited until the last moment before the 1 July, 2017 deadline to transfer its eligible super fund members onto the MySuper platform.

It heard Suncorp also advised its financial advisers to encourage members to make changes to their super portfolios so their accounts remained active.

Maurizio Pinto, the executive manager of the office of the superannuation trustee within Suncorp Portfolio Services Limited, admitted to the commission that Suncorp only shifted its eligible members onto the MySuper platform between 9 June and 19 June, 2017, despite having had years to do so.

The commission also heard from Linda Elkins of Colonial First State, Commonwealth Bank’s wealth management arm.

Elkins was appearing for the second time at the royal commission.

In April, when Elkins first appeared, she told the commission that CBA was the “gold medallist” for charging customers fees for no service.

On Tuesday, the commission was told that Colonial First State (CFS) wrote to the Australian Prudential Regulation Authority (Apra) in 2014 to say it needed more time to transfer members to low-fee default MySuper platform.

CFS had been required to move default fund members onto the MySuper platform by 1 January, 2014, but it failed to do so for thousands of members.

Elkins told the commission that CFS had made the mistake because it failed to realise that the members – eventually exceeding 15,000 – were eligible for MySuper.

The commission heard that CFS wrote to members to convince them to choose an investment option so their accounts would remain active and they wouldn't have to shift onto the MySuper platform.

Senior counsel assisting, Michael Hodge, told the commission Colonial's letter was the product of one thing, "which was Apra saying you are committing an offence and Colonial needing to stop committing offences."

Elkins replied: "Yes, yes you're right."

It meant CFS committed more than 15,000 offences. However, Apra chose not to prosecute the offences and instead tried to help CFS rectify the problem.

The commission also heard from the Hostplus chief executive, David Elia.

Hostplus was established to cater for workers in the tourism and hospitality industries. It has over 1.1 million members with $34.5bn under management. It has generated the highest returns of any super fund for the last two years, and has some of the lowest fees.

Hostplus was grilled for its decision to spend $260,000 of members’ fees to take 120 chief executives to the Australian Open tennis tournament in Melbourne.

Elia said he would like to live in a world where that type of thing was unnecessary, but he had lost the business of chief executives because they’ve felt like they didn’t have a personal relationship with his fund.

He said employers should be flocking to Hostplus, because it’s the best-performing fund in the country, and they were acting irrationally by taking their business to lower-performing funds.

“I don’t like the fact we lose default fund status or lose employers to other competitors. It does not make any sense to me,” he said.

“I wish I didn’t have to do it. The reality is it is a competitive landscape we are dealing with.”