The ability for employers to pay employees higher superannuation levies, offer better insurance benefits or pay for insurance premiums will be lost in three of the four model options put forward by the Productivity Commission in its Review on Superannuation Alternative Default models.
According to the Workplace Super Specialists of Australia (WSSA), many employers use superannuation and insurance as a tool to distinguish themselves from other employers, often providing increased benefits to their workforce.
However, under Model’s 1,3 and 4, which amongst other things, advocates for employee choice of default super fund, employer’s ability to pool together its workforce and negotiate better insurance rates, pay insurance premiums or pay higher compulsory super rates, will be eroded.
“Removing this benefit will have a negative impact on many employees,” said WSSA President Douglas Latto.
The WSSA is presenting its submission to the Productivity Commission in Sydney on Monday 8th May.
In it, the WSSA will confirm its support for Model 2 proposed by the Productivity Commission to provide assisted employer choice, however will also look to remove the heavy employer filter proposed in this model. It is proposed this filter would be applied to funds based on investment performance and exposure to various assets.
“This must be considered in light of an investor’s time frame and risk appetite,” WSSA writes in its submission. “It would be a very brave panel member who would accept responsibility for arbitrary decisions such as this should something go wrong.”
For a copy of the submission, please click here.
SOURCE: Workplace Super Specialists of Australia
