Royal Commission accuses industry funds
Industry superannuation funds have been accused of paying "substantial" sums to trade unions.
The Royal Commission into Trade Union Governance and Corruption has today issued a discussion paper in which it has dedicated an entire chapter to superannuation and within which it states, "Industry superannuation funds pay substantial sums to the unions with which they are associated including directors' fees, reimbursement of director's expenses, office rental, advertising expenses and sponsorship".
The discussion paper then cites the example of TWUSuper for the 2007 to 2014 financial years during which it said the super fund "paid in excess of $6 million to the TWU and its branches."
The Royal Commission discussion document actually went to the trouble of separating out superannuation funds from the so-called "employee benefit funds" run by trade unions because of superannuation's unique nature - "namely that it is compulsory".
In its opening paragraphs of the chapter dealing with superannuation, the Royal Commission document said, "The potential for coercive conduct and conflicts of interest in enterprise bargaining identified in respect of employee benefit funds also exists in respect of superannuation funds. This is because of the institutional links between trade unions and industry superannuation funds".
It has also questioned the validity of default funds under modern awards, stating: "Separate from the question of choice of superannuation fund is whether unions should be able to negotiate for terms in an enterprise agreement which specify a specific default superannuation fund with financial links with the union negotiating the agreement".
"On the one hand, preventing the union specifying a particular fund as a default would reduce the problems of potential coercion and conflicts of interest. On the other, superannuation is compulsory and the particular industry superannuation fund with which the union is associated may provide a good return for members," it said.
Recommended for you
The financial services technology firm has officially launched its digital advice and education solution for superannuation funds and other industry players.
The ETF provider has flagged a number of developments as it formally enters the superannuation space through a major acquisition.
While all MySuper products successfully passed the latest performance test, trustee-directed products encountered difficulties.
Iress has appointed Insignia Financial’s former general manager of master trust and insurance products as its newest CEO of superannuation, who will take over from Paul Giles.
