FSC attacks industrial judiciary on modern awards
The Financial Services Council (FSC) has urged the Productivity Commission to eliminate the industrial relations judiciary in the form of Fair Work Australia from the superannuation default fund process.
The FSC said it was of the view that superannuation funds should "not be entangled in the Fair Work system" and accused the industrial judiciary of "abrogation of responsibility", such that "funds under investigation by the APRA (Australian Prudential Regulation Authority) [are] being prescribed as default funds".
In a submission filed with the Productivity Commission this week, the FSC has urged a competitively neutral regime for default funds under which employers would be permitted to select any APRA-regulated super fund as a default fund.
It said that if this were permitted, "a designated Fair Work process would not be required, as an employer would be free to select any APRA-regulated fund".
"This approach has the benefit of removing conflicted industrial parties from selecting default superannuation funds which are approved without consideration by Fair Work Australia," the FSC submission said.
The submission then goes on to recommend that the Fair Work Act be amended to eliminate the need to nominate particular superannuation funds by specifically stating, "a modern award must not include terms requiring employer contributions to be paid to named superannuation funds".
The FSC submission also suggests that all MySuper products should be capable of being utilised as default funds in awards approved by Fair Work Australia.
The FSC submission makes clear it believes that Fair Work Australia erred from the Government's original intentions by becoming involved in the specific selection of superannuation funds.
It pointed to a letter written by the former Minister for Superannuation and Corporate Law, Senator Nick Sherry, which requested that if Fair Work Australia prescribed default superannuation funds in modern awards, it should establish an appropriate process and criteria for selecting funds rather than doing so on an arbitrary or non-transparent basis.
"The Commission chose not to heed the Minister's request and instead prescribed superannuation funds into awards without adopting a process," the submission said.
"The consequence is that neither a process nor review mechanism for the selection of default superannuation funds in modern awards exists."
Recommended for you
The corporate regulator has cancelled the AFSL of a Perth advice firm, with the firm having previously seen its licence temporarily suspended in 2020.
Having proposed changes earlier this year, ASIC has clarified how it will support licensees with additional relief under the reportable situations regime.
AMP has partnered with BlackRock and research house Lonsec to provide a model portfolio capability on its North platform that offers “portfolio customisation at scale” to advice practices of all sizes.
Money Management rounds up actions ASIC took against advice individuals in the first half for FY25 from exam falsifications to dishonest conduct.
