Govt warned about 'massive monopoly' in default superannuation
If the Federal Government fails to look into default funds under modern awards as part of Stronger Super, it runs the risk of entrenching a significant monopoly in the superannuation industry.
That is one of the key claims to emerge from a roundtable conducted this week by Super Review, where most panellists agreed that the Assistant Treasurer, Bill Shorten, was taking a significant risk by pursuing the Stronger Super changes in the absence of addressing the default fund situation.
The industry has been expecting the minister to announce the Government's position with respect to Stronger Super within days, but one of the Super Review roundtable participants - former Financial Services Council chief executive, Richard Gilbert - said to do so without addressing concerns around default funds risked "entrenching a massive monopoly in default superannuation".
He said he believed the Government should have acted to put the question of default funds before the Productivity Commission sooner because current time scales meant any changes might trail the introduction of Stronger Super by as much as two years.
However, Sunsuper chief investment officer David Hartley said opening up the default fund market needed to be accompanied by greater transparency around the fees that were being charged.
"If commercial operators are willing to operate on the same profit margin as industry funds then it's probably fair enough," he said.
Hartley said he was happy for commercial funds to do it (provide default superannuation funds) - as long as there was absolute clarity on what they were taking out.
AUTHOR
Mike Taylor
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