The Fair Work Commission’s current role in the MySuper system facilitates a “closed shop” scenario which “explicitly favours superannuation funds owned by unions and employer organisations”, the FSC has claimed in a briefing to “government and Treasury” decrying the “excessive costs” associated with the regime.
“We…urge the government to disband the Fair Work Commission default fund selection process as a priority,” said FSC chief executive John Brogden.
“MySuper funds are approved in a detailed process by the prudential regulator, APRA. The role of the Fair Work Commission is a duplication of an existing process by the appropriate body,” he said.
Mr Brogden said the superannuation industry is receiving “no benefit whatsoever” from the “$45 million” paid by the industry “just to comply with the Fair Work Commission default fund selection”.
Instead, the status quo has “delivered more red tape and unnecessary regulatory costs for employers”, he said.
The figure cited by Brogden comes from a survey of FSC members in which they were asked to calculate the costs associated with compliance with the default fund regime.
The FSC said that a government intervention into the Fair Work Commission’s role in the Australian superannuation system should help foster greater competition in the sector.
“Half of the superannuation sector has been excluded from the critical stage of the decision-making process which determines whether a fund will be named in a modern award,” Mr Brogden said.
“It is completely unacceptable that consumers’ best interests are being overlooked in favour of sectional interests.
“We are calling on the government to commit to a genuinely competitive default market and to bring an end to this outrageous waste of members’ money," Mr Brogden said.
