Government backs evidence based default super process
The Federal Government has announced its support for an evidence based and expert led process for selecting and assessing default superannuation funds in modern awards.
Minister for Finance and Superannuation, Bill Shorten, said the move would ultimately lead to more transparency and competition in the field.
Mr Shorten says the submissions by the Treasury and the Department of Education, Employment and Workplace Relations (DEEWR) in response to the Productivity Commission’s draft report into default fund superannuation arrangements for modern awards will ensure default funds in modern awards will meet the best interests of its members.
“We want default contributions to be put into the most secure and high performing funds possible so Australian workers can maximise their retirement savings,” Mr Shorten said.
The joint submission supports the Productivity Commission’s suggestion that the selection of default funds for inclusion in modern awards to be undertaken by an expert panel within Fair Work Australia (FWA).
Around 70 per cent of award reliant employees in Australia do not actively choose their superannuation fund. This means the selection of default superannuation funds for modern awards must be driven by the best interests of member employees.
The submission by Treasury and DEEWR proposes funds seeking to be listed as default funds in modern awards should have the opportunity to put an Expression of Interest to the expert panel within FWA, which would assess the funds against legislated criteria proposed by the Productivity Commission.
A Full Bench of FWA would then consider the expert panel’s report, hear the views of industrial parties and determine whether or not to vary the relevant awards.