Industry fund’s PC submissions confuses origins of industry super

Industry fund VisionSuper appears to have confused the origins of the superannuation guarantee and industry funds, claiming "industry super funds were first established in the 1980s to protect Australian workers' super from high fee and commission retail products".

The VisionSuper submission responding to the Productivity Commission's issues paper on Alternative Default Models appears to overlook the impact of the Hawke Government's Prices and Incomes Accord with the Australian Council of Trade Unions (ACT) which gave rise to superannuation as an offset for wages increases.

Instead, the fund has argued that there should be no material change to the current default system because it is continuing to play its role.

"Industry super funds were first established in the 1980s to protect Australian workers' super from high fee and commission retail products. They are still performing that role," the submission said.

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"There is no evidence that opening ups default fund status to further competition would lead to increased active participation by members. There is no evidence that the current state of play has led to higher fees, lower quality products or the erosion of member balances — quite the opposite in fact."

However, it said there was plenty of evidence that continued changes to the superannuation system were detrimental to the system .

"….even if removing default funds did offer marginal benefits in terms of competitiveness or enhanced member engagement, the benefit may well be cancelled out by the resulting disengagement caused by the further changes," the submission said.

"The best interests of members and the stability and integrity of the superannuation system are best served by leaving default arrangements as they are."

The submission also went on to claim that retail superannuation funds were conflicted in circumstances where the Corporations Act compelled them to act in the best interests of shareholders, whereas superannuation legislation compelled industry funds to act in the best interests of members.