Industry super funds argue awards deliver more than basic SG
A key grouping of industry super funds is arguing for industrial awards to remain integral to the selection of default funds because it claims awards often provide more and better benefits than those delivered under the superannuation guarantee.
The Industry Funds Forum (IFF) has instanced some awards which provide for superannuation to be paid where earnings are $350 a month, whereas the superannuation guarantee only requires superannuation to be paid if the employee earns $450 a month or more.
Additionally, the IFF submission to the Productivity Commission's review of default funds under modern awards argues that a number of awards provide for superannuation to be paid on all leave - including maternity leave - whereas the superannuation guarantee does not require superannuation to be paid on maternity leave.
"Some awards provide for superannuation to be paid at a rate in excess of 9 per cent of Ordinary Time Earnings (OTE), and many awards specify the method of payment and frequency, which is often different to the minimum requirements under the SG," the submission said.
It said the superannuation guarantee was always intended to set the minimum requirements, yet some award rates are in excess of these minimums.
"Modern awards cover entitlements, and the capacity of the industrial parties to deal with superannuation in this way should not be diminished, as superannuation is an important part of total remuneration," the IFF submission said.
The submission backs the approach of the Industry Super Network (ISN) in arguing for the establishment of an expert panel to select funds to be default funds under modern awards, drawn from eligible Australian Prudential Regulation Authority-registered MySuper funds.
"In order to protect the interests of members, it is very important that all default funds named in modern awards are relevant to the industry/s covered by the award and are operated by a trustee with knowledge of the industry/s and the needs of fund members," it said.
AUTHOR
Staff Writer
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.
