The Productivity Commission's granular exposé of the state of Australia's superannuation industry should be a timely and sobering reminder for senior executives at major banks that they stand only a remote chance of winning market share in the public offer retirement savings market.After spending more than two decades trying to displace industry funds in the burgeoning superannuation sector, the wealth management arms of the major banks have failed to match the long-term net returns of their not-for-profit rivals.If the Productivity Commission's draft recommendations for overhauling the retirement savings system are implemented, the business case for bank-owned superannuation offerings could wither rather quickly.The PC wants the government to abolish the existing default superannuation system and replace it with a new process where a government appointed independent panel would maintain a short list of the ten best performing funds.People entering the workforce for the first time would be asked to select one of the funds on the list.The problem for the major banks and AMP is that none have MySuper products that have achieved a level of performance that would justify inclusion on such a list.According to the latest returns data published by Super Ratings, seven large industry funds  - the Retail Employees Superannuation Trust(REST), CBUS, Australian Super, Catholic Super, Austsafe Super, Care Super and Hostplus - are ranked among the ten best performing super products over the last ten years.The only bank-related fund in Super Ratings' top ten is the Commonwealth Bank's staff super scheme, which is only available to present and past employees of the company.The merit-based thinking underpinning the PC's proposed overhaul of default super arrangements would deliver more members to these big industry funds at the expense of bank-owned retail offerings and other providers.The Super Ratings rankings are supported by annual investment returns data published by APRA.Fund level data published last year by the regulator found that only 13 superannuation providers posted annual net returns over ten years that averaged five per cent or better.APRA found that nine of these providers were industry funds. The other four top performers were either government or corporate super schemes.According to APRA, bank-owned providers of MySuper products such as MLC and Colonial delivered annual net returns over ten years of below three per cent.Under the selection system proposed by the Productivity Commission, the underperformance of the MLC and Colonial product offerings means they would each stand little chance of being included on the recommended product list of an independent government panel.The PC's reform agenda further vindicates the recent strategic decisions taken by ANZ and NAB to sell or restructure key parts of their troubled wealth management operations.It also casts doubt on Westpac's apparent resolve to stick with its wealth management strategy, which includes retention of the BT wealth arm.The proposed dismantling of the current default super arrangements will also have profound effects on the complexion of the industry superannuation sector.While the largest industry funds, such as Australian Super, REST and CBUS, are likely to grow because of their long-term records for generating