End union/industry fund monopoly, says FSC
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The Financial Services Council (FSC) has called on a re-elected Labor Government to end what the FSC describes as the union/industry fund dominance of superannuation within industrial awards.
At the same time as providing a qualified welcome to Prime Minister Julia Gillard’s launch of a modified MySuper proposal as Labor policy, FSC chief executive John Brogden said the default superannuation fund market covered by industrial awards needed to be opened to competition.
He said this was crucial to ensure that fees continued to be driven down.
“Retail superannuation funds have some of the cheapest products on offer with the best services and product features, yet these funds are excluded from award super by Fair Work Australia,” Brogden said.
For its part, the Industry Super Network (ISN) praised the Government’s policy announcement, claiming industry funds had been offering low-cost commission-free super since their inception.
The ISN said it particularly welcomed the extension of the proposed ban on commissions to include group life insurance offered by superannuation funds. However, most group superannuation arrangements are negotiated directly between funds and insurance manufacturers and do not involve planners or commissions.
The accountancy body CPA Australia said the Government policy announcement was a step in the right direction, but warned about the associated regulatory imposts.
CPA Australia chief executive Alex Malley said the MySuper proposal, if properly implemented, could be a catalyst to boost retirement savings. But Malley added that the Government needed to ensure fund members did not bear the regulatory costs associated with the scheme being administered by the Australian Prudential Regulation Authority and the Australian Securities and Investments Commission.
The Government’s policy changes around the MySuper proposals were deemed by almost all players to be a significant improvement on those outlined by the Cooper Review panel and its chairman, Jeremy Cooper.
AUTHOR
Mike Taylor
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