Continuing divide on default funds
The Government's preferred approach to default funds under modern awards and that supported by many industry super funds would simply serve to add cost and complexity to the arrangements, according to a number of submissions received by the Productivity Commission.
The submissions, reacting to the Productivity Commission's draft report emanating from its inquiry into default funds under modern awards, have revealed a continuing deep divide between the positions adopted by the Government and industry funds and entities such as the Financial Services Council (FSC) and groups such as MLC.
Indeed, a submission filed by MLC with the Productivity Commission argues that imposing a specialist selection panel within Fair Work Australia would not only impose additional cost and complexity, but also place an unnecessary burden on the employer.
It claimed such a move would "continue to hamper competition including diminished capacity for new entrants, potential regulatory arbitrage and the risk of regulatory/procedural disparity due to diverging paths/views between the relevant expert panel and established regulators (in particular, the Australian Prudential Regulation Authority)".
For its part, the FSC has consistently argued for the removal of the industrial judiciary in the form of Fair Work Australia, while AMP has warned of the difficulties in establishing an independent body for the selection default fund where "it appears that there is presently no logical body or association in existence that has the requisite skills and resources necessary to house this expert panel".
The AMP submission added, "nor is there a body that has complementary duties or functions that could be relatively easily amended to absorb the responsibility of designing and carrying out a selection process for default funds in awards".
The Minister for Financial Services and Superannuation, Bill Shorten, last month endorsed a submission compiled by the Treasury and the Department of Education, Employment and Workplace Relations as reflecting the Government's preferred position on default funds.
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