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ISA against scrapping 'super safety net'

A number of employers have expressed concerns about the introduction of red tape that forces them to select a fund from an unranked list of MySuper funds, Industry Super Australia has found.

Research conducted by the industry fund lobby group – compiled off a survey of 550 small and medium-size employers – has found 56 per cent of employers are concerned at the cost of having to choose a workplace super fund.

ISA said Australian employers would collectively spend an estimated $1.8 billion in administrative costs in considering which fund to choose for their employees.

“More than eight million Australians don’t choose their own super fund and rely on their employer to place them in a high performing fund. These funds are selected in a merit‐based process overseen by the Fair Work Commission (FWC),” Industry Super Australia chief executive David Whiteley said.

“The FWC process puts competitive pressure on the super industry to deliver strong investment returns, provides a safety net for employees’ retirement savings and cuts red tape for employers.

“It removes the cost and guesswork for employers and ensures the vast majority of Australians who don’t actively choose their own fund are placed in a high quality, safety net fund,” Mr Whiteley said.