The Fair Work Commission (FWC) has rejected a request by the Financial Services Council (FSC) for a hearing on the validity of the expert panel for default superannuation funds.
The commission has also denied the FSC’s requested one week extension for MySuper submissions.
Last Thursday FSC CEO John Brogden asked the FWC for an urgent hearing after a series of heated exchanges between the two parties surrounding the current constitution of the expert panel.
Recent dramas have included two members of the panel being removed due to conflicts of interest that were bought to the attention of FWC president Iain Ross by the FSC.
Ross then replaced the two with only single member, leading to accusations that the new panel was not properly reconstituted.
Until last Thursday, when he suddenly appointed himself to the board as the third member, Ross has not been swayed by letters from the FSC that request the process should be disbanded or that he explain his position.
In its decision to deny the hearing, the FWC expert panel said it would be “inappropriate” for the current panel members and the president to consider or determine their own positions.
“To the extent that the [FSC] maintains the position that the presidents’ decision to re-constitute the expert panel did not comply with, or achieve compliance with, the relevant provisions of the Act, the most appropriate course would be an application for judicial review of that decision in the Federal Court of Australia,” the response stated.
The FSC is now considering launching the suggested legal action against the FWC.
“It is an extraordinary circumstance where the president of the Fair Work Commission appointed himself to the expert panel and is now using that as a defence on why a hearing cannot occur,” CEO Brogden said. “This process does nothing but continue the status quo of the union-backed industry fund’s monopoly on the default superannuation market.”
The FSC’s position has been supported by a variety of other organisations, including the Association of Financial Advisers (AFA).
COO Phil Anderson told Wealth Professional
that the FWC shouldn’t have anything to do with the default fund selection process.
“The consequences of retaining the current [FWC] model is that we are unlikely to see a genuine opening up of competition in the default super model, which at present is very much in favour of industry funds,” he said.