Fair Work panel needed to lift super default standards
Industry Super Australia (ISA) has called on the Government to appoint members to the Fair Work Commission (FWC) Expert Panel to allow the panel to ensure that only high-quality superannuation funds are named as default funds in modern awards.
ISA said it was critical for the panel to bet default funds to ensure appropriate funds received employer super contributions on behalf of those employees who did not exercise choice in a submission to the Senate Standing Committee on Economics regarding the Treasury Laws Amendment (Your Super Your Choice Bill 2019).
It said funds that wanted to manage default contributions whether by being a modern award or an enterprise agreement should meet a high standard and needed to deliver net returns above a transparent performance benchmark.
“The same member interest first approach…should be applied by the FWC when employers and employees seek ratification of enterprise agreements that contain a restriction on choice of superannuation fund,” ISA said.
“ISA’s analysis in 2017 of a sample of enterprise agreements ratified by the FWC found that 82% of all employees covered by agreements had no restriction on choice of fund and that only 1.9% of the workforce had some form of restriction on choice of fund.
“…Where choice was restricted there were specific factors, including the provision of industry relevant insurance in high-risk industries; mechanisms to provide for compliance and payment of superannuation contributions in industries with high rates of noncompliance and additional superannuation benefits, including higher than super guarantee contribution rates.”
ISA noted there should be a presumption that choice of superannuation fund would be available to employees.
“Where an agreement proposes, following collective endorsement by employees and the employer, that the choice of superannuation fund is restricted, it is appropriate that the FWC be empowered to approve the restriction of choice where it can be demonstrated that doing so is in the interests of the employees covered by the terms of the relevant enterprise agreement by reference to the quality of the nominated superannuation fund.”
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