On 30 October 2012, the Minster for Employment and Workplace Relations announced measures to reform the selection of default superannuation funds in modern awards. Modern awards are industry or occupation-based minimum employment standards. The measures are the Government’s response to the Productivity Commission’s inquiry into default superannuation funds in modern awards. They include the following changes:
- the Government will establish an Expert Panel within the Fair Work Commission;
- all superannuation funds with a MySuper product will be able to apply for selection as a default fund on an equal basis;
- the Expert panel will assess funds on the basis of legislative criteria and develop a Default Superannuation List; and
- a Full Bench of the Fair Work Commission will determine which particular funds from the Default Superannuation List are best suited for inclusion in each modern award, with the best interests of the employees covered by that particular award as their overarching consideration.
The main costs associated with the system are on MySuper funds applying to the Expert Panel. The main benefits associated with the system are expected improvements in product and service quality for fund members and employers arising from greater competition. In addition there should be improved transparency in the selection process. Superannuation funds will benefit from being able to apply for selection as a default fund on an equal basis. The Regulation Impact Statement was prepared by the Department of Education, Employment and Workplace Relations and was assessed as adequate by the Office of Best Practice Regulation. While the RIS was provided to the OBPR for publication on this website, it was not included in the explanatory memorandum, as required under the best practice regulation requirements.
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