Turn on, turn off recommendation 'absurd': Mcdonald
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The managing director of Snowball Group, Tony Mcdonald, has criticised a recommendation by the Investment and Financial Services Association (IFSA) in their superannuation charter that employees on a corporate super plan be able to turn off aspects of their corporate super advice services.
Speaking to Money Management, Mcdonald said if employees were allowed turn off aspects of that corporate super package at will, they would be able to steal those services from their employer and adviser by getting them for free without anyone finding out.
“We have negotiated to put something in for all employees, and if we’re running seminars with free advice as part of the package, how are we going to know if someone sitting in on the seminar is paying for the cost of that seminar, or if they’ve turned off that aspect of it and are getting it for free?” he asked.
“What happens if he turns [that aspect] off halfway through the year? Do we get back the subsidisation costs? It’s just absurd.
“You can’t have an employee, with parts of [a] super package as part of their remuneration benefits as agreed to by [a] policy committee, choose to turn off and on parts of the package,” he said.
“IFSA put this through as part of their charter, [but] they didn’t really think it through.”
Mcdonald added that allowing an employee to turn off aspects of a plan at will would usurp the employer and the policy committee that was instituting the corporate super plan for the benefit of all workers.
There needed to be rules to make sure a corporate super plan was a general service for all employees and could only be turned off by the policy committee on behalf of all the members, he said.
If employees were not satisfied with aspects of a plan, they could opt out of the plan and go to another fund, he said.
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