Union funds fear Abbott government plans to move against provisions that help them become default superannuation funds for workers

This article is more than 5 years old

This article is more than 5 years old

Industry superannuation funds are launching an aggressive advertising campaign against what they fear is an imminent move by the Abbott government to make it more difficult for them to be the “default” for employees who do not nominate a fund for their superannuation.



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These contributions are estimated to be worth between $6bn and $9bn a year and because historically the “default” fund was set as part of industrial negotiations, the union funds dominated.

The recent financial services inquiry recommended a continuation of the most recent system – where a “default” fund is decided through the Fair Work Commission – but the big banks have been lobbying for employers to have free choice.

And in a recent speech, the assistant treasurer, Josh Frydenberg, said he wanted to unleash the “strongest possible competitive forces for the benefit of every superannuation fund member”.

Industry Super cites research showing that over the last decade industry funds have delivered higher returns to their members and accuse the big banks of “embarking on a major government lobbying campaign to design superannuation regulations to suit their business model.”

The chief executive of Industry Super, David Whiteley, said the banks wanted to be able to “bundle” their business banking services and the super arrangements for a business’ employees – an offer he said would benefit the business but not the workers.

The Financial Services Council – which represents the bank-backed retail funds – said more competition over default funds would bring down fees.

“The banks seem to stop at nothing to get their hands on Australians’ super savings,” Whiteley said.

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“The retail and bank-owned super sector has failed to deliver competitive investment returns and are seeking to create an unlevel playing field that suits their business model potentially at the expense of Australians’ super savings”.

The government’s response to the financial services inquiry headed by David Murray is expected within weeks.

The Industry Super ad campaign will run through October and include billboards, digital airport screens in Qantas business lounges, online videos, social media and TV sponsorships in the AFL and Sky News.