Better regulation and governance, enhanced transparency and improved competition in superannuation
In 2013, the Australian Government released a discussion paper, Better regulation and governance, enhanced transparency and improved competition in superannuation, seeking feedback on a range of policy proposals for superannuation.
The paper was released 28 November 2013, and submissions closed 12 February 2014. It asked for feedback on the best way to improve transparency and competition in the employee default superannuation funds market, as well as feedback on policy proposals arising from the government's election commitments on superannuation.
A number of default superannuation funds are listed in most modern awards. One of the listed funds must be used for employees to whom the superannuation provisions in the modern award apply and who have not exercised their right to select an alternative fund.
Under the Fair Work Act 2009 superannuation funds offering MySuper products are eligible to apply for inclusion in modern awards and default superannuation funds in modern awards must be reviewed every four years (starting from 1 January 2014).
From 1 January 2014 the Fair Work Commission is required to undertake a two stage process to select default funds
- Superannuation funds are able to apply to the commission to have their product/s included in a Default Superannuation List. An expert panel in the commission considers a range of criteria in determining whether to list a product including, for example, the product's long term investment return target, fees and governance practices.
- A Full Bench of the commission lists up to 15 default funds in each modern award, based on their assessment of the most suitable funds from the Default Superannuation List and after they have heard views from parties.
The government is seeking views on whether this model is a fully transparent and contestable default superannuation fund system for modern awards.
The discussion paper is available at the Treasury website.