FSC’s Court win on default funds
The Fair Work Commission's (FWC's) process for selecting default superannuation funds has been left in disarray in the wake of a Full Federal Court decision that the commission's expert superannuation panel is not correctly constituted.
The Full Federal Court on Friday upheld a challenge by the Financial Services Council (FSC) and determined that the FWC Commission Expert Panel for the selection of MySuper default funds in Modern Awards was invalid.
In doing so, the Full Bench has virtually forced the president of the FWC, Justice Iain Ross to await a decision by the Minister for Employment, Senator Eric Abetz, on the appointment replacement members of the expert panel resulting from the standing aside of two former members on the basis of perceived conflicts of interest.
In its Friday decision, the Federal Court declared that the decision by the President of the FWC to appoint himself to Expert Panel was not valid; and that the Expert Panel was not correctly constituted.
Commenting on the decision, FSC chief executive, John Brogden said the Federal Court had found the FWC Expert Panel lacked the number of superannuation experts required by law and that Justice Ross had also been found to have acted outside his legislative powers by appointing himself to the Expert Panel.
"We have argued from the beginning that the Expert Panel was conflicted and then incorrectly reconstituted," he said.
Despite the findings of the Full Federal Court, Industry Super Australia was claiming it as a victory claiming the FSC, representing bank owned superannuation funds "have failed today to remove the quality filter on default superannuation".
The ISA's deputy chief executive, Robbie Campo claimed the Federal Court had found that the FWC process for default fund selection — which ensures default funds are chosen on merit — would stand.
Recommended for you
As the year draws to a close, a new report has explored the key trends and areas of focus for financial advisers over the last 12 months.
Assured Support explores five tips to help financial advisers embed compliance into the heart of their business, with 2025 set to see further regulatory change.
David Sipina has been sentenced to three years under an intensive correction order for his role in the unlicensed Courtenay House financial services.
As AFSLs endeavour to meet their breach reporting obligations, a legal expert has emphasised why robust documentation will prove fruitful, particularly in the face of potential regulatory investigations.
