The bank owned super funds have continued their efforts to undermine and dismantle consumer protections which ensure a transparent quality filter will apply for selection of default funds.
Click here to read this on the Industry Super Australia website
The Financial Services Council, on behalf of the bank owned super funds, is pursuing legal action in the Federal Court against the Fair Work Commission, in an extraordinary attempt to remove the quality filter recommended by the Productivity Commission.
Over 5 million members of Industry SuperFunds and their employers rely on the quality filter to shortlist the best performing super funds to act as defaults.
The banks preference for a 'free for all' – where bank employed financial planners and business bankers sell compulsory super at workplaces – will reduce the integrity of Australia's super system and ultimately consumer confidence.
With an estimated eight in ten employees relying on default super funds, a system that is not driven by long term net investment performance will ultimately lead to lower aggregate savings and greater reliance on the aged pension.
Rather than trying to compete with Industry SuperFunds, the major banks have sought to bring back commissions to financial advice and super, while also trying to derail the merit based quality filter for super default funds, as recommended by the Productivity Commission.
The only conclusion that can be drawn is that the major banks are seeking to avoid competition based on long term net returns delivered to members.
The FSC's case will be heard by a Full Bench of the Federal Court in late May or early June and both the Commonwealth (on behalf of the FWC) and the Minister have sought leave to intervene.
ISA will determine their involvement in the case once we have seen the submissions of other parties. However, ISA's decision will be ultimately guided by the fact that over 5 million members of Industry SuperFunds and their employers rely on the quality filter provided by the FWC process to shortlist the best super funds to act as defaults.
Click here to read this on the Industry Super Australia website