The Investment and Financial Services Association (IFSA) has slammed a decision by the Australian Industrial Relations Commission (AIRC) to hand what IFSA describes as “a virtual monopoly” to a range of industry superannuation funds under a so-called “award modernisation” program.
The program is designed to create a system of modern employment awards to operate in conjunction with a new Australian workplace relations system due to come into effect in 2010. The AIRC has named 12 default super funds for 17 awards, and these funds are exclusively industry super funds.
(Funds to which employers were making contributions on or before September 12, 2008, will be permitted as default funds.)
IFSA claims the move denies true competition and potentially denies employees access to “some of the most cost-effective super funds in the Australian marketplace”.
In a statement, the chief executive of IFSA, Richard Gilbert, said: “The Australian super fund marketplace is well contested, with larger corporate and wholesale master trusts offering a range of products with low fees. It is odd that employers should be denied access to such funds.”
Concerns have also been raised over the adequacy of insurance arrangements under the proposed default funds.
IFSA says the AIRC should not make the decision on which fund should be the default fund under which award.
“IFSA’s preferred position is that default super funds not be nominated in awards or alternatively, it not be compulsory for employers to choose the default fund specified in the award,” it says.