The govt sticks the boot into the corrupt union parasites.




One default fund for life. The Productivity Commission takes on unions over super
Peter Martin MARCH 29 2017 - 12:35AM

Union-dominated super funds would lose their special status under a draft Productivity Commission recommendation that would delink superannuation from awards and allocate new workers to default funds only once.

Two-thirds of Australian workers stick with the default fund chosen by their employer or industrial agreement, and many end up with multiple accounts after being put into new default funds each time they change jobs.

VIDEO: Targeting superfluous super

The Productivity Commission says we have too many superannuation accounts. Peter Martin explains the logic.
The commission believes that 40 per cent of workers have more than one account, meaning that many have multiple life insurance policies and multiple sets of administrative costs.

The combined administrative and unnecessary insurance costs amount to $150 million for every 500,000 to 600,000 duplicated accounts.

The commission's draft recommendations will remove the ability of unions and employers to leverage workers into their jointly controlled industry funds and the ability of banks to tempt employers to leverage workers into bank funds by offering employers sweetheart banking deals.

"This isn't against industry funds or against retail funds," the commission's chairman Peter Harris said. "It's about removing the guaranteed flow of new members to all sorts of funds."

"It's interesting that the only thing that seems to unite the superannuation industry is its opposition to the hideous prospect of having to compete for work. That might be an indication that we are on the right track."

Under the commission's proposal, Australians entering the workforce would be allocated to a default fund only once and would stay with it for life or until they decided to leave.


Peter Harris from the Productivity Commission says the recommendation isn't against industry funds or against retail funds. Photo: Ben Rushton

It has put forward four models for allocating new workers to funds without, at this stage, identifying which it prefers.

One is to have employers make the decision by choosing from a shortlist of funds deemed to be "good". Extra protections would be put in place to ensure they put their employees' interests ahead of their banking relationships.

Another is to have employees make the choice from a list of between four and 10 funds selected by a government body. Those that did not would have their super allocated to a "last-resort fund" possibly run by the government's Future Fund.

A third model is for the government to run an auction for the right to be the national default fund for a fixed number of years with the winner being the fund that offered to charge the lowest fees. The winner would be required to offer the same low-fee product to anyone who joined.

The only thing that seems to unite the superannuation industry is its opposition to the hideous prospect of having to compete for work.
Productivity Commission chairman Peter Harris

The fourth model is a more complicated tender process in which the government picked a winner on a number of criteria including past performance, member satisfaction, investment strategy, fees and innovation.

"It's a philosophical choice for the government," Mr Harris said. "If the member or employer is involved, they own the decision and might become more involved in their super. If the government makes the decision, it will own the choice.

"The important thing is that it is absurd to continue to allocate people to new default funds each time they change jobs for no other reason other than that it was a simple thing to do in 1992."

The inquiry's deputy chair, Karen Chester, said back when compulsory super was set up in 1992 many people still thought they might have one job for life.

"These days under-25s are turning over jobs once every 1.5 years. Australians aged 25 to 35 are turning over jobs every 2.5 years. We have seen estimates that suggest today's young people will have 17 jobs over their working life."

Claims by industry funds that their default status served members well because they provide good returns didn't hold water, Ms Chester said.

Claims by industry funds that their default status served members well because they provide good returns didn't hold water, Ms Chester said.

"Averages can hide a multitude of things. There's a long tail of entrenched underperformance in both the industry and retail funds."

"You only need to look at the profile of default funds. They have two-thirds fund members, but only one-quarter of fund assets. What does that tell you?"

Ms Chester pleaded for input from ordinary fund members before the report is finalised.

"To date, most interest has come from the funds themselves," she said. "We want to also hear from young Australians and those who might want to think about their interests, such as parents. This is about us going for a circuit-breaker, looking out for the interests of super fund members".

More overleaf

Why would Australians want their auper interfered with when union funds do better year after year after year 

And that intellectual giant LW talks about something but who nose wot.

Certainly not the topic because it is too hard for the paw soal to understand.

Now LW you simply MUST do a copy and dribble scribble.

And LW what is a auper ? Some sort of Lefty medicine ? Evidence of Parkinsons ?