Coalition accuses Government of undermining super industry

The Coalition has attacked the Federal Government’s move to mandate default funds saying it will hamper efficiency and returns in the superannuation industry.

Shadow Minister for Financial Services Chris Pearce said, at a Melbourne Investment and Financial Services Association lunch, that efficiency and returns rely on competition between superannuation funds.

“The Government’s decision to mandate default funds adversely tilts the delicately balanced situation where increased efficiency and better returns to fund members rely upon healthy competition,” he said.

“A combination of steady returns over the longer term, reducing fees and an increase in portability suggests that the system is well-structured to serve our retirement strategy into the future.”

Pearce said the default move could threaten to undermine the progress made in delivering better returns for members.

“This process of fund selection seems a haphazard and inconsistent exercise at best,” he said.

“The problem remains that no selection criteria has been publicly released."

Pearce said despite the Australian Industrial Relations Commission saying it was not the body to select default funds; the Government had forced it to make choices.

How default funds are selected remains a mystery, he said, as the criteria for ranking individual funds remains secret.

“The Government publicly stated that this would be a transparent process,” Pierce said.

“It has been anything but.

“The public has no idea of the type of criteria which has been used throughout this ongoing process of award simplification.”

He called on the Government to release the selection criteria before the next round of industry awards.

“The writing of default funds into awards under the guise of modernisation and simplification has been both clandestine and fundamentally misguided,” Pearce said.