The impending Stronger Super announcements are unlikely to contain changes to the way default superannuation funds are chosen, according to Chant West principal Warren Chant.
Under the current arrangements, default funds are part of the award that covers each workforce. To get onto the default fund list, superannuation funds have to approach either the employer organisations or the union organisations during award negotiations, said Chant.
The problem is that the unions tend to be “hell-bent on superannuation,” whereas the employer groups are more concerned about other factors, Chant said.
“In the negotiations, the employer organisations tend to cave in on the funds being nominated in the awards quite early. Superannuation is more dear to the hearts of the union representatives than the employer representatives,” Chant said.
As a result, the whole process is very much weighted against the retail funds – and the big criticism is that the way that funds get into the awards has nothing to do with whether they’re good funds or not, Chant said.
“There’s been a lot of debate about this and [Minister for Financial Services and Superannuation] Bill Shorten said that there will be an inquiry about this next year. I don’t think anything’s going to come out about this in Stronger Super,” Chant said.
