The current system whereby default funds are chosen by the Fair Work Commission is an example of the industry fund sector going “way too far” under the previous government, according to Chant West.
Speaking to ifa, Chant West director Warren Chant said MySuper is “all about corporate super”.
“MySuper is all about the industry funds arguing there are a lot of people in small organisations who are in retail products that are very expensive and people are being ripped off,” he said.
“The industry funds were not happy about small employers choosing a default option. They wanted the money to go to industry funds,” said Mr Chant.
“So once they came up with MySuper, they said: 'Wouldn’t it be good if we could control which funds employers could invest in?'”.
As a result, the Fair Work Commission – an institution created by Labor – was given the authority to decide which default funds would be allowed to be listed under each modern award, he said.
“And if you’re not nominated in a modern award then an employer would have to take the money out of the fund that they’re in now and put it into one of those nominated funds,” said Mr Chant.
“It’s very non-competitive in nature. It’s a law that doesn’t make sense and should be reversed,” he said.
However, because the government will not be in a position to reverse Labor's legislation until the new Senate is formed in July, the Fair Work Commission is continuing to set out its timetable for the new regime.
“Fair Work will continue on with what it’s doing but there’s a very strong movement [to scrap this],” said Mr Chant.
“From everything the government's said, they’re very keen to reverse this legislation.”
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