Industry Super Australia has called on the “major banks” to rule out legal action, as the FSC seeks an “urgent hearing” to challenge the Fair Work Commission’s (FWC's) default fund expert panel.
In a statement issued yesterday, the Financial Services Council announced it has requested a hearing before the FWC prior to the deadline for MySuper applications on April 28, in order to challenge the “validity of the expert panel’s constitution and its ability to proceed with the review of default superannuation funds in modern awards”.
“The FSC is calling on the Fair Work Commission to allow us to make submissions on the current constitution of the expert panel which selects MySuper funds eligible for awards,” said FSC chief executive John Brogden.
“The extraordinary move by the Fair Work Commission president to appoint himself to the expert panel is not enough to remedy this issue.
“The expert panel must be validly reconstituted before the process can proceed. The process is fast losing the confidence of the industry and must be urgently remedied.”
While not singling out the FSC directly, Industry Super Australia also issued a statement yesterday, urging the “major banks” – which are represented by the FSC – to “rule out threatened legal action”.
ISA chief executive David Whiteley said that if opposition to the “legislated merit-based assessment of funds” was successful in preventing the current proposed system from going ahead it could “leave members worse off”.
“Seeking to halt a merit-based assessment of default super products follows on from the banks’ failed efforts to wind back financial advice laws and bring back sales commissions,” Mr Whiteley said.
“A merit-based quality filter that prioritises long-term investment performance is a necessity for Australia's compulsory super system.
“The major banks should re-think their approach to super, and seek to work with the super industry to establish a consensus on designing regulatory settings in the best interests of Australians who do not choose their own fund and who need financial advice.”
The exchange between the two lobby groups follows the FSC’s previous suggestion that the FWC role in selecting default MySuper funds facilitates a “closed shop” scenario which “explicitly favours superannuation funds owned by unions and employer organisations”.
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