FWC expert panel transparency challenged
The Fair Work Commission's (FWC) expert panel has been challenged to give thorough reasoning for its default fund choices if the process goes ahead, with fears funds could be selected haphazardly given the looming deadline.
Indeed, the process as it currently stands could give priority to incumbent default funds and may not be scrupulous when it comes to analysing investment performance, according to Rafe Consulting director Barry Rafe.
Rafe conducted an analysis of the FWC's proposal to change the default fund structure under modern awards and found consumers would foot a bill of up to $400 million to transition to one of two to 15 default funds.
He told a panel discussion at the Financial Services Council's annual conference the process carries major risks, including anti-selection.
Addressing the same panel, Mallisons partner Nathan Hodge queried the expert panel's transparency requirements.
"Is the expert panel going to publish it's reasons?" He said.
Hodge expressed fears that funds that are not selected will be wiped out.
He noted that funds have the chance to reapply for selection four years later, but said most would likely not survive that long.
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