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.
Just like how motor trades employees got herded into the high performance MTAA default super plan, with a turbo charged target allocation fund that exploded in a flaming wreck during the GFC.
“More than eight million Australians dont choose their own super fund and [b][i]rely on their employer to place them in a high performing fund[/i][/b]. These funds are selected in a merit?based process overseen by the Fair Work Commission (FWC), Industry Super Australia chief executive David Whiteley said.
So David says that the Mysuper funds are high performing funds? I don’t think that is correct that they are high performing funds? Is this an investment recommendation that David is making to the employees? Is David expecting employers to invest time and energy to select the best high performing fund?
I think Davids Statement is incorrect and probably a misleading statement of fact and gives employees a false impression of the likely outcome that there superannuation fund will achieve.
But I suppose this isn’t the first incorrect statement of fact David has uttered in regard to superannuation recently. So we shouldn’t be surprised.
Yes but why have the choice restricted to Union dominated funds. No one should support the closed shop arrangements that exist at present. People deserve choice. As an employer of more than 20 people I cant see how choice is a problem. ISA are just afraid of competition.
$1.8b? Really? Another number made up by ISA. All an employer has to do is choose any MySuper fund and their obligation is discharged. As if that’s going to cost employers $1.8b in administrative costs.
If an employer is going to invest time in looking at which fund to choose, then rather than look at the past performance of balanced funds, employers should be looking at which MySuper funds offer lifestage funds as their default. The majority of Australians that don’t choose their own super fund are younger Australians – who’d be far better off in an investment option offering higher exposure to growth assets, rather than anachronistic balanced funds that treat all investors the same regardless of age.
This is a smoke and mirrors argument. By having an expert panel select funds this will force 10’s if not 100’s of thousands of employers to select a new default fund as their fund will not appear on a list. They will still have to select from 2-15 funds, not an easy thing to do. Also they are being forced to put in management time to do this. If any MySuper Fund can be a default then few employers will have to change and will remain with the selection that they have already made and which they are probably happy with. Also members will end up with 2 funds unless they transfer them themselves adding considerably to the number of accounts each member will have, a problem that we are trying to fix. Very self serving arguement.