The FSC, which yesterday announced it was proceeding with legal action against the Fair Work Commission (FWC) in regards to the creation of the default fund Expert Panel, said the ISA claims are “wrong in law”.
In an open editorial published in The Australian Financial Review yesterday, ISA chairman Peter Collins said it serves to look “very closely” at the motivations of the FSC’s “words and actions”.
“The bank-owned super funds are seeking to derail the independent scrutiny process in an attempt to leverage their relationships with employers to cross sell products, with no independent quality screen, creating a chaotic free-for-all,” he wrote.
But FSC chief executive John Brogden said his organisation has legal advice which confirms that superannuation funds and related parties cannot provide inducements to employers to secure a workplace deal.
“Section 68A of the Superannuation Industry Supervision Act clearly prevents a related party of a superannuation fund - such as a bank - from paying an inducement to an employer to secure workplace default fund status,” said Mr Brogden.
“The only conflicts in superannuation are the deals made by unions and employer groups through the Fair Work Commission,” he said.
Mr Brogden argued that the MySuper default fund selection process is neither merit based nor transparent.
“APRA is the quality filter for all superannuation funds. There is no place for selection of default funds in the industrial system,” he said.
ISA chair Mr Collins said the current arrangements through the FWC “apply a merit-based, transparent quality filter, enabling all superannuation funds to publicly tender for nomination in modern awards”.
“The banks are entitled to compete for market growth if they are good enough, but no amount of re-writing history can account for the fact that their inferior products don’t stack up against industry funds,” said Mr Collins.
