Fair Work Australia should select default superannuation funds: ISN
The Industry Super Network has called for Fair Work Australia to have a hand in the selection of default superannuation funds in modern awards.
In a submission to the Productivity Commission, the Industry Super Network proposed Fair Work Australia should select default funds as part of its modern awards review every four years.
Members of Fair Work Australia should be joined by "a panel of recognised superannuation experts to assist in such deliberations", said the Industry Super Network.
"Each application from an eligible fund should be considered in the context of the relevant award and the industry it serves," said the Industry Super Network.
"FWA should consider the views of the representatives of those who pay (employers) and those who receive superannuation payments (employees) and the ability of the fund to provide relevant members and employer services to potential members covered by the relevant award, including the appropriateness of the insurance offering for that demographic," said the Industry Super Network.
In addition to the proposed role of the Fair Work Australia, the Industry Super Network argued the main selection criteria for default funds should be long-term net returns.
The Industry Super Network also recommended that a typical modern award should have a minimum of two and a maximum of six default funds, since doing so "will ensure that employers are not overloaded by choice and that employees are protected by having more than one option to rely on".
Funds that 'flip' their members into higher priced MySuper products should not be eligible to be named as a default fund in a modern award, added the Industry Super Network.
The calls by the Industry Super Network come after the Law Council of Australia seriously questioned the ability of Fair Work Australia to make rules about the selection of default funds under modern awards.
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