The federal coalition has backed the Industry Super Network’s (ISN) recommendation that super funds seeking inclusion in the default pool of superannuation funds be based on performance.
Opposition assistant treasury spokesman Mathias Cormann said the ISN’s recommendation effectively acknowledged the current process for the selection of default funds under modern awards was inappropriate and should not continue.
“The current closed-shop, anti-competitive process through Fair Work Australia is a national disgrace and should have been fixed up by the government long ago,” Senator Cormann said.
“It is not transparent, not competitive and inappropriately favours union-dominated industry super funds.”
He said under the introduction of MySuper, a low-cost super product aimed at whittling down the $19 billion mountain of ‘lost’ super, every registered MySuper product would be certified to comply with the consumer protection requirements enshrined in law by the government.
“As such, any MySuper product should be able to compete freely in the default superannuation market,” he said.
“There is no need for an additional secretive and discredited process through Fair Work Australia to further determine which MySuper products should be included as default funds under various modern awards. We welcome the ISN’s focus on fund performance.”
The lobbying arm of the industry superannuation funds has recommended that poorer performing funds be locked out of default super, blocking underperformers from more than $10 billion in union and employer group contributions.
Cormann said the current system was not transparent and represented a poor outcome for consumers.
“Current APRA (Australian Prudential Regulation Authority) data does not allow super fund members or employers to compare the performance of different funds on an ‘apples for apples’ basis,” he said of APRA.
