Sherry denies monopoly claims

The Minister for Superannuation and Corporate Law, Senator Nick Sherry, has denied that the Australian Industrial Relations Commission (AIRC) decision on award superannuation in any way limits the choices available to Australian employees.

Asked to respond to industry complaints that the AIRC decision has created a virtual monopoly for some funds recognised within awards, Senator Sherry said the decision “does not affect an employee’s right to choose the fund to which their superannuation is paid — all Australian employees will continue to be entitled to choose their own superannuation fund”.

However, industry groups, including the Investment and Financial Services Association (IFSA) are arguing that the “default fund” status granted to some funds offers those funds a distinct advantage over those not open to employers to choose as a default.

Sherry has argued that the AIRC’s decision has made little practical difference to the pre-existing arrangements with respect to default funds within awards and that it “would be unreasonable to impose complex superannuation decisions, with associated ‘red tape’ cost and legal liability, on all employers to select a default fund”.

He said employers and employees were also free to agree upon a different default fund to those set out in the modern award in any enterprise agreement that they make.

Senator Sherry said the Government was strongly encouraging employers, unions and employees to examine the long-term performance of superannuation funds, including the total amount of fees, in making decisions with respect to default funds.