Productivity Commission acknowledges 'closed shop' in default super funds
The Productivity Commission has signalled it will be recommending vastly more transparency be injected into the process of selecting default superannuation funds under modern awards.
At the same time, the Productivity Commission has confirmed it is prepared to consult with the competition regulator, the Australian Competition and Consumer Commission, about what some people had referenced as the "closed shop" aspects of the current default fund arrangements.
Giving evidence before a Senate Estimates committee last week, Productivity Commission deputy chairman Mike Woods referred to submissions received on the default fund issue and said that across virtually all submissions "there is recognition that transparency could be increased".
He said this applied not only to the criteria used for selection, "but the process by which those funds are then considered for nomination in awards could improve by way of having greater transparency and having clearly defined criteria".
Under questioning from the Opposition spokesman for Financial Services, Senator Mathias Cormann, Woods agreed that was not an open, transparent, merit-based selection process.
He also agreed with Cormann's contention "that the current process is a closed shop type arrangement".
The Productivity Commission indicated it would be issuing its interim report on the default fund arrangements later this month.
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