The Transport Workers Union forced its members to join the industry superannuation fund which paid its directors, including senior union officials, $200,000 in fees each year, the royal commission into trade unions has heard.
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The royal commission was told this conduct raised a potential conflict of interest.
The hearing in Perth on Monday was told that it was a requirement of enterprise bargaining agreements struck in 2011 and 2013 that TWU members join the fund.
Jeremy Stoljar, counsel assisting the royal commission into trade union governance and corruption, said four of the nine directors of TWU Super were among the most senior officials of the union.
The head of the negotiating team for the TWU enterprise agreements of 2011 and 2013 was Michael Kaine, an alternate director for the board of TWU Super.
Mr Stoljar said TWU Super was paying the TWU about $200,000 in directors' fees each year, about $500,000 in reimbursement for the salaries and expenses of a number of superannuation liaison officers employed by the TWU and a further $100,000 in sponsorship.
He said evidence to come before the commission would give rise to potential conflict of interest issues.
Mr Stoljar said TWU officials had a duty to get the best superannuation deal for employees, but members including Western Australian truck driver Paul Bracegirdle had complained they were given no choice in which fund they could join.
Mr Bracegirdle, 48, told the commission on Monday that after he began working for Toll Holdings he discovered in 2005 that it was compulsory for his superannuation contributions to be paid to TWU Super.
In his evidence, Mr Bracegirdle said he asked a union delegate in 2009 whether he could choose his own super fund and was told no.
After visiting his local federal member, Stephen Smith, in Perth, Mr Bracegirdle received a letter from Chris Bowen, the minister for superannuation at the time, confirming his only choice of super fund was TWU Super if it was part of an enterprise bargaining agreement.
The commission heard that former TWU Western Australian branch secretary Jim McGiveron allegedly told Mr Bracegirdle to ''eff off'' when he asked about the superannuation fund in August last year.
After years of persistence, Mr Bracegirdle finally joined the fund of his choice because in the 2013 enterprise agreement there was a three-month window of opportunity for employees to nominate a different fund.
"Now that window has closed, we're back to square one right now," he said in a sworn statement.
A spokesman for the Transport Workers Union said superannuation outcomes for members are better when they are achieved through collective bargaining.
''Decades of experience has shown that the retirement savings of members are maximised through the use of not-for-profit industry funds, rather than being eroded by the excess fees and charges imposed by the big banks,'' the spokesman said. ''Industry super funds have consistently outperformed their retail rivals.''
