So, who won in the Federal Budget superannuation lobbying stakes? The Financial Services Council (FSC) – that’s who.
The Federal Treasury has finally released the submissions which helped the Government frame up last week’s Budget, and that reveals that the FSC was at the forefront in arguing for the stapling of superannuation accounts and allocation of default members to high performing default funds.
What is more, the recommendation was contained within an attachment to the FSC’s second (supplementary) pre-Budget submission to the Treasury – its Accelerating Australia’s Economic Recovery document developed earlier in the year.
Within that document, the FSC said the “Government should prioritise the recommendations of the Royal Commission into Financial Services and the Productivity Commission (PC) that individuals should have a single default account, that they carry between jobs, to avoid account balance erosion.
“The Royal Commission and PC were clear that consumers should carry with them their existing account or an account with the first fund they choose when they enter the workforce,” the FSC documents aid. “The PC found this would save individuals $2.6 billion each year.”
“The Government should also prioritise implementing its preferred model for allocating default members to high performing superannuation funds.”
“The PC recommended removing the selection of default funds from the industrial relations system. The COVID-19 pandemic provides real-world support for this proposal by exposing concentration risks, particularly where a fund’s membership was skewed towards a particular industry or age cohort,” the FSC’s supporting documentation said.
