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MySuper eliminates need for Fair Work Australia
The Financial Services Council (FSC) has argued that the introduction of the MySuper regime will make the involvement of Fair Work Australia in the selection of default superannuation funds under modern awards unnecessary.
In a submission filed as part of the Productivity Commission review of the default funds under modern awards regime, the FSC referenced research undertaken by Westfield/Wright which it said confirmed the advent of MySuper funds as a result of the Stronger Super initiatives ought to put paid to the need for the current default funds under the modern awards regime.
The research found "the MySuper concept of standardisation, simplicity and fewer default options attracts overwhelming support".
Elsewhere in its submission the FSC urges that the new MySuper regime be used to enable employers to select any Australian Prudential Regulation Authority (APRA)-regulated MySuper fund as a default fund from 1 July, next year.
"If this were permitted, a designated Fair Work process would not be required, as an employer would be free to select any APRA-regulated MySuper product," the submission said.
"This approach has the benefit of removing conflicted industrial parties from selecting default superannuation funds which are approved without proper consideration by Fair Work Australia. "To alleviate any burden on employers in selecting from many MySuper funds, the Government should maintain a MySuper website for employers and consumers," it said.
The submission said this approach would also remove another agency from the already complex superannuation system which involved APRA, the Australian Securities and Investments Commission (ASIC), the Australian Taxation Office and AUSTRAC.
"The more agencies involved, the higher the regulatory cost, the greater complexity and the likelihood of failings in consumer protection," it said.
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