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Fix default superannuation funds, says Legalsuper
The Federal Government has been urged to tighten the rules around how default superannuation funds are selected by employers to make them more effective and beneficial to the employees affected.
Legal industry fund Legalsuper chief executive Andrew Proebstl said the changes were needed in circumstances where the current primary legal obligation of employers is to have a default fund but not necessarily to choose a “good” default fund for their employees.
“New rules are needed because most Australians continue to accept the default fund chosen by their employer assuming their employer has followed due process when selecting it,” he said.
Proebstl said Australia’s superannuation system was only as good as the default super funds chosen by employers.
He said Legalsuper was recommending tightening four key areas with respect to the default fund appointment process including requiring employer to review their default fund at least every five years, banning the selection of funds with which the employer did business, requiring staff to be involved in the default fund process and requiring the upfront disclosure of any corporate deals.
AUTHOR
Mike Taylor
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