Any attempt to diminish the collective power of industry superannuation funds through choice in super would only serve to entrench long-term inequality for workers upon retirement, particularly women, according to the Victorian Trades Hall Council (VTHC).
The VTHC has used a submission to the Senate Economic References Committee inquiry into the Government’s new superannuation choice legislation to argue against the dismantling of the current superannuation default regime.
The submission said the proposed laws purported to construct a false “choice” for workers by removing their right to bargain for their default funds.
“Bargained funds are almost always industry super funds because they are run only to profit members and consistently produce better outcomes in comparison to for-profit funds,” it said.
The VTHC submission said industry super funds tended to do well in part, because they were directed by workers.
“These super funds create stronger returns because of their large numbers of members, who have joined together to maximise their collective retirement savings,” it said. “In turn, these collective savings are better invested to produce higher returns.”
“The Turnbull Government’s proposed changes seek to dismantle this system and leave workers worse off,” the submission said.