The Financial Services Council (FSC) has called on the Government to move to reform the default superannuation selection as a matter of urgency while the Australian Institute of Superannuation Trustees (ASIT) wants the Government to prioritise the appointments of expert panellists necessary to let the existing process proceed.
Both organisations pitched their views in the wake of the Federal Court handing down the reasons for its decision that the Fair Work Commission's existing special superannuation panel was invalidly constituted.
AIST chief executive, Tom Garcia claimed the Government needed to prioritise the appointment of new members to the panel because it was critical to protecting members' interests.
"There are many factors to consider for a fund to be nominated into an Award," he said. Selecting the right default fund for a particular group of employees or workplace requires careful consideration and the process must be rigorous and transparent."
However FSC chief executive, John Brogden claimed the Government needed to act to end the current default fund selection regime by making all complying MySuper products eligible for selection.
"Superannuation funds that offer competitive products and provide good service to their members have nothing to fear from competition," he said. "The closed shop of default superannuation is a risk not just for individuals who will have lower savings in retirement as a result of less competition, but for the Government which will ultimately bare the cost of lower fund balances in retirement through paying more in Age Pensions."
Garcia said it was unrealistic and impractical to expect employers to be able to make an informed choice about the best default fund for their employees, given that there were more than 100 MySuper products to choose from.