The Financial Services Council has submitted a supplementary submission to the Productivity Commission’s inquiry into Default Superannuation Funds in Modern Awards in response to matters raised in the Treasury and DEEWR (the Departments) joint submission, released by the Minister last month.

 

The FSC expressed concern that the Departments’ joint submission:

  • proposes the status quo remain despite the Commission identifying substantive problems;
  • presents a reform proposal which would fail to address contestability, transparency and procedural fairness issues;
  • ignores the ground-breaking changes which are to commence with MySuper and the broader Stronger Super reforms over the next two years;
  • proposes inappropriate roles for other bodies;
  • contains incorrect information; and
  • misrepresents information on the treatment of superannuation in the industrial system.

 

The FSC argues that the superannuation system has been progressively de-linked from the industrial system, and “does not see a case for maintaining named superannuation funds in awards”.

 

Where the Departments argue that Fair Work Australia has significant expertise in “working constructively with stakeholders in undertaking the many functions for which it is responsible under the FW Act,” the FSC maintains that “FWA (and its predecessor the Australian Industrial Relations Commission) demonstrated its disinterest in matters related to superannuation over the past five years.”

 

The FSC claims that the Commission abrogated its responsibility to establish a process for selecting and reviewing default superannuation funds in Modern Awards, which has “led to superannuation funds under investigation by the Australian Prudential Regulation Authority (APRA) being prescribed as default funds simultaneously”.

 

“It is therefore critical that appropriate consumer protection mechanisms exist, and that the process becomes transparent and contestable.”

 

Submissions to the Productivity Commission inquiry are here.