CSSA supports employer's choice for default superannuation
The Corporate Super Specialist Alliance (CSSA) has come out in support of a recommendation put forward by the Productivity Commission in its interim report into default superannuation funds.
Of the four options proposed as part of the inquiry, CSSA president Douglas Latto said he shares the view of the Law Council of Australia, the Financial Services Council (FSC) and the Transport Industry Superannuation (TIS) Fund that an employer should be able to choose a fund from all those that offer a MySuper or other approved default product.
Originally considered by the Productivity Commission to be too confusing for employers, Latto said the proposal - Option 1 - was the best option because if the MySuper legislation passes into law, "then there will be no need to nominate default funds in awards as a MySuper fund would in fact be a default fund".
In its interim report submission, the FSC preferred this option because "it eliminates the need for any Fair Work Australia (FWA) or other process for listing or delisting funds as every MySuper product would be an eligible default fund at workplace level".
The council added that it was in the best interests of consumers/members because it creates the most competitive market.
The TIS Fund commented that there would be "no net benefit to designing criteria over and above this" when MySuper fund options already provide "a simple solution".
In dismissing the Industry Super Network's (ISN's) suggestion that there are too many superannuation funds available to consumers, Latto said that allowing employers to choose a super fund means that it can be tailored specifically to the needs of the employee's workplace.
He said that the ISN's comment implies that past performance is a good indication of future returns, which "defies current financial investment logic".
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