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Employer opt-out unbalanced say AIST
The Australian Institute of Superannuation Trustees (AIST) says unilateral employer discretion will erode the balance of employer and employee best interests in choosing default funds for awards.
AIST's submission to the Productivity Commission's draft report into default superannuation funds in modern awards has supported the establishment of an expert panel under Fair Work Australia (FWA), but said employers should not be able to opt-out of default arrangements once they had been decided.
"If employer discretion can be exercised without a requirement to notify that choice and without the need to meet an explicit 'member interest' test, then the notion that the award selection process has substance and protects interests becomes worthless," it said.
The Productivity Commission was incorrect to assume employees' and employers' views on the selection of default funds would always converge, according to AIST.
"There may be features of a superannuation fund that may not be seen as desirable by some employers, even though they provide real and direct benefits to employees," the submission said.
AIST said FWA should have the power to create single-issue enterprise agreements that exist side-by-side with other enterprise agreements that apply at the workplace and could replace the "flawed" opt-out clause.
"As well as covering superannuation, such agreements should also identify the parties covered, the nominal term of the agreement, a consultative mechanism and dispute settlement procedures," it said.
AIST said out-sourcing the expert panel was too risky.
The Association of Superannuation Funds of Australia (ASFA) in its submission to the Productivity Commission said it was too early to cement default arrangements that made assumptions about MySuper,
ASFA disputed many of the findings in the report, including the number of 'choice' superannuation members and the average number of superannuation accounts per member. ASFA said most of the complaints to the Superannuation Complaints Tribunal had been regarding the decision of trustees and not their conduct.
ASFA recommended, at a minimum, the merit-based appointment of superannuation fund trustees.
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