Call to break industry fund/IR nexus
The Financial Services Council (FSC) has pointed to assertions contained in a Trade Union Royal Commission discussion paper about industry funds paying ‘substantial sums' to unions to argue that superannuation must be decoupled from the industrial relations system.
FSC chief executive, Sally Loane, also pointed to suggestions by the Royal Commission that the potential exists for coercive conduct and conflicts of interest in enterprise bargaining and the manner that this might impact superannuation.
"Superannuation must be decoupled from the industrial relations system to avoid these conflicts and to open up the superannuation market to competition and choice," Loane said. "If Australians are forced to save a portion of their salary for 40 to 50 years, they must be allowed to decide who will be the custodian of their money."
The FSC chief executive reinforced her organisation's policy that all employees should be able to exercise choice of fund and all employers should be able to choose any MySuper product to be a default fund in their workplace.
The Royal Commission discussion paper dedicated an entire chapter to superannuation within which it stated, "Industry superannuation funds pay substantial sums to the unions with which they are associated including directors' fees, reimbursement of director's expenses, office rental, advertising expenses and sponsorship".
The discussion paper then cited the example of TWUSuper for the 2007 to 2014 financial years during which it said the super fund "paid in excess of $6 million to the TWU and its branches."
The Royal Commission discussion paper has opened for debate whether superannuation should be capable of negotiation by unions as an award-related industrial relations issue.
Recommended for you
Financial Services Council chief executive, Blake Briggs, is urging Minister for Financial Services, Stephen Jones, to take advantage of the QAR opportunity to reduce regulatory duplication and ensure advice is affordable.
Former chair of the House of Representatives’ Standing Economics Committee, Tim Wilson, is planning a return to politics after losing his seat in the 2022 federal election.
Morningstar is going to offer research ratings of funds in the $3.5 trillion superannuation sector for the first time in response to demand from financial advisers.
Treasurer Jim Chalmers has opened a consultation into the design of the annual superannuation performance test, canvassing views on a range of reform options.
