Default super laws to hit advisers

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Industry funds will continue to dominate the default super market, thanks to Superannuation Minister Bill Shorten.

This is the assessment of Shorten’s opposite number, shadow Superannuation minister Mathias Corman, who has labelled the Fair Work Amendment Bill – which passed through parliament yesterday – as anti-competitive, conflicted and inappropriately favouring union dominated industry funds.

“In legislation passed by the Parliament today Bill Shorten has sought to protect the vested commercial interests of the union movement at the expense of the public interest,” said Cormann.

“Instead of putting the interests of one segment of the financial services sector first, he should have put the interests of Australians disengaged from their superannuation arrangements first.”

Cormann went on to attack Labor’s track record in the default super area.

“Julia Gillard as the then Minister put in place the current widely discredited closed shop and anti-competitive process by which default funds in modern awards are selected through Fair Work Australia,” he said.

“Even Labor had to finally recognise in the lead-up to the 2010 election that the process to select default funds under modern awards lacked credibility and promised to replace it with a more open, transparent and competitive process.”

Cormann has also pointed the finger at Shorten for his lack of enthusiasm in dealing with the issue, claiming that he was slow to act at first, and that now the legislation that he has delivered “falls way short of the promise of an open, transparent and competitive process for the selection of default funds under modern awards”.

“It is a continuation of a process where conflicted parties within Fair Work Australia will select default super funds under modern awards,” added Cormann.

“The government is currently also legislating to enshrine all the consumer protection requirements it judges are important for Australians who do not make active choices about their own super arrangements through their MySuper Bills.

“Given that is happening, surely any MySuper product should be adequate as a default product by virtue of its registration as a default product and be able to compete freely in the default fund market.

“There is absolutely no reason why every product which qualifies as a MySuper product should not be able to compete freely in the default fund market.”

Where do you stand on the new default super laws? Place your comments below.

More stories:

Default super: ‘Major funds may be forced to close’

ISN weighs into default super debate

Shorten accused of protecting union interests

  • John Walker on 3/12/2012 9:31:29 AM

    Industry super funds have shareholders, UNIONS, the more funds under management the more money in the union till

    Errrrrrrr conflict of interest?
    Advisers need to become political and stop pussy footing around professonal... fees, commissions etc

  • Andrew on 30/11/2012 3:35:22 PM

    This is simply an extension of the partisan process that is the modern contemporary Labor Party's Ethos.They have long abolished the peoples policy and in contmept of all Australians flagrantly impose hopelessly conflicted policy with the sole purpose of ensuring they have some semblance of a chance of retaining power.
    The system is as Gareth cleary articulates , one whereby default fund slection will become entangled in a myriad of process as various industries start addresssing the new regime.The attention that all facets of financial services has been exosed to , the scrutiny , criticism , regulatory and legislative change and the tarnishing of advice in the process , principally based on conflict of intertest and the impact on consumers is fundamental in its impact , and yet , here we have the Labor Government standing airliy oblivious to the extraordinary conflicts in this regualtory change by acting in their own self interets .Astounding.

  • Geoff on 30/11/2012 1:07:38 PM

    This Government reeks of corruption from the top down. Bill Shorten has proven this again with this legislation. No regard for Australians, just his crony unions. Shame on you Mr Shorten for putting the unions before the people of Australia.

  • Greg F on 30/11/2012 11:38:49 AM

    Of course it is blatant union favourtism from a corrupt Government. Part of the problem here is that we seem to have an impotent press that just accept the 'spin' and tripe that labour spurts out in reply to these critisisms and leaves it at that. Why don't they really pursue the vested interests and conflicted interests. Shorten being directly involved with certain industry funds? Ask questions of who pays the salaries of the ISN representatives? It isn't hard, but there seems to be a big resistance to doing so. Maybe vested interests at play in not upsetting the multimillion dollar advertising regime of the industry funds?

  • Gareth Hall on 30/11/2012 9:46:41 AM

    What is the purpose of creating a new superannuation "structure" called MySuper, the design of which is controlled by legislation, intended to be the only super option that can be a default fund going forward, and then putting in place a selection mechanism as to which MySuper can be nominated in each award. Isn't it as plain as the nose on your face that this is just ridiculous red tape? Surely any MySuper product must be acceptable as a default for an award by design. If this is not the case the whole MySuper legislation must be fundamentally flawed.
    I think Senator Cormann's conclusion that the extra level of bureaucracy is in place only in an attempt to favor Industry Funds is a logical conclusion.

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