It’s been a hard week for the Fair Work Commission’s (FWC) expert superannuation panel, which just lost half of its four members after accusations of conflicts of interest.
Iain Ross, the president of the FWC, has announced his decision to dismiss Vicki Allen and Stephen Gibbs due to perceived conflicts of interest. A third member facing conflict of interest claims, Arthur Apted, was cleared and allowed to continue in his role.
The decision now leaves just Apted and panellist Tim Harcourt to carry out the review of the default super funds in workplaces.
The issue of conflict of interest was initially raised by the Financial Services Association (FSC) in a letter to the FWC, seeking the removal of the panellists.
In a statement about the results of his subsequent investigations, Ross said that he has become aware that panel member Allen is the director of the Motor Trades Association of Australia Superannuation Fund, which is an authorised MySuper product.
He felt there would or could be a conflict between her duties as director and her performance as a panel member – especially if she were to deal with applications from the MTAA Superannuation fund or the trustee of that fund.
“In my view it is likely that if expert panel member Allen continues to deal with [this] matter she will receive confidential or commercially sensitive information about funds or entities that are actual or potential competitors of the MTAA Superannuation Fund or the trustee of that fund,” Ross stated.
Disclosure statements requested from the four members have been published on the FWC website, and reveal that Allen also resigned as the director of Superannuation Administration Corporation (trading as Pillar Administration) on February 24, three days after a letter from Ross requesting further information about it.
In his decision to remove Gibbs from the panel, president Ross noted that he was made aware that Gibbs is the director of Australian Ethical Superannuation, a trustee of the Australian Ethical Retail Superannuation Fund (AER), which is a MySuper product.
Ross said in his view Gibbs would also have a conflict between his duties as director, and his performance as a panel member. He believed that as a panellist, Gibbs would be privy to confidential information from funds or entities that are potential competitors of the fund or trustees of AER Super.
The removal of the two panel members raises even more doubt about the FWC’s role in electing the default workplace superfunds, which has already been heavily criticised.
The Corporate Super Specialist Alliance (CSSA) president Douglas Latto previously told Wealth Professional
that the organisation had major concerns about the process and the FWC’s lack of experience.
“Our members, for example, are specialists in helping people select super funds and they spend years and years doing it,” he said. “I don’t see how the Fair Work Commission can walk in after a few months. It’s like getting your handyman to do your electrical work”.
The FSC also want the FWC out.
reported that chief executive John Brogden called the whole thing embarrassing.
“This has basically rendered the process impotent. We want the Fair Work Commission to be removed completely from the process of selecting super funds in awards,” he said.