ISA lauds Fair Work Commission on default formula
Industry Super Australia (ISA) has issued a statement welcoming the announcement by the Fair Work Commission for the selection of default funds under modern awards, arguing that it is superior to forcing employers to choose from all registered MySuper products.
ISA chief executive David Whiteley's statement said that, consistent with the recommendations of the 2012 Productivity Commission review, awards would be varied to ensure that only MySuper accredited products were named, with funds then making an application to an expert panel of the Fair Work Commission and being assessed against an objective criteria.
"ISA supports a transparent and contestable process that allows all eligible MySuper funds to apply to be considered as one of up to 15 funds to be named in a modern award," the statement said.
Whiteley claimed the process for the selection of default funds had to be transparent and contestable and that the selection process had to use objective criteria — "the most measurable of which is long-term net investment performance".
"ISA believes that the best interests of employees should be the paramount consideration when determining a process by which default funds are selected," he said. "Under this process, every fund has the opportunity to provide written and verbal submissions to promote their fund. These submissions will be on the public record — the hallmark of a transparent process in the public interest.
"From this process up to 15 funds will be selected, providing employers with confidence in the short list and a manageable number from which to make their selection.
"This is in stark contrast to a system where employers are required to choose from possibly hundreds of funds. Employers have consistently resisted having to choose the super fund for their employers, not necessarily having the time or expertise nor wanting the responsibility," Whiteley said.
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