Operators of MySuper products should be required to have adequate processes in place to collect unpaid superannuation contributions, the Australian Institute for Superannuation Trustees (AIST) has said.
The institute called on the Productivity Commission, which is assessing the selection process of default funds in Modern Awards, to make the service a requirement for default fund providers.
AIST chief executive Fiona Reynolds said it was important that all operators of MySuper default funds were committed to ensuring that employers met their superannuation guarantee obligations.
"If you are taking default money, then part of your obligation must be to follow up employers who aren't paying super when they should be" Reynolds said.
"We need to recognise that the interests of employers and employees are not necessarily aligned.
"While an employer might not want to choose a fund that has an effective contributions arrears process, this is an important protection measure for employees."
The problem of unpaid super is extensive, especially in the construction and hospitality industries where many employees are hired on a contract basis or are still paid in cash.
Between 2009 and 2010, the Australian Taxation Office (ATO) collected $146.38 million in unpaid super, while the Industry Funds Credit Control collected an additional $75 million.
But Reynolds said that many superannuation providers still don't have appropriate services in place.
Under the proposed requirement, AIST wants MySuper product providers to show they have a collection service in place, although Reynolds did not want to go as far as requiring operators to be subjected to regular reporting on contribution collections.
"We were envisaging that if a fund had a service in place that it would monitor itself its effectiveness as you do with all your outsource providers," she said.
AIST argued that the ATO alone does not have the resources to collect all unpaid super contributions.
"There is a clear benefit for employees to belong to funds that use an arrears collection service. For some people, this could make a significant difference to their retirement outcome," Reynolds said.
