The Corporate Super Specialist Alliance has thrown down the gauntlet to the federal government over its move to shift default super choice away from employers.
Alliance president Douglas Latto said: "The federal government appears to think employers are not capable of selecting default super funds on behalf of their workers. And yet, the government expects us to believe that Fair Work Australia (FWA) is."
InvestorDaily asked the Financial Services and Superannuation Minister Bill Shorten to respond, but no comment was received by the publication's deadline.
Shorten had backed a submission from Treasury and the Department of Education, Employment and Workplace Relations (DEEWR) responding to the Productivity Commission's draft report on Default Superannuation Funds in Modern Awards.
The Treasury/DEEWR submission supported the selection of default funds for inclusion in modern awards by a panel of FWA representatives and superannuation experts.
Latto said under the government option, the FWA panel would assess and choose funds on behalf of millions of employees.
"How could FWA ever hope to understand their varying and disparate needs?" he said.
"Who do they suggest will provide professional financial literacy and advocacy services to them?"
Employers, on the other hand, were "uniquely placed" to understand the superannuation needs of their employees and to tailor solutions, he said.
"It's far better for workers to enjoy workplace-tailored super solutions than to have bland 'blanket solutions' imposed upon them by the FWA. Our concern about the FWA solution deepens when we assess the significant level of criticism directed at them following their handling of recent enquiries," he said.
"Their impartiality has been brought into question and they have taken a long time to reach decisions. We don't believe they have the necessary resources, expert knowledge and high level of superannuation experience required to take on such a critical role."
He said the Productivity Commission's draft report also put forward another option, which involved each employer choosing a fund from all those that offered a MySuper or other approved default product.
"If MySuper legislation is passed, and all default funds must include a MySuper option, then there will be no need to nominate default funds in awards. MySuper funds are designed specifically to be default funds and must meet legislated standards. This option would result in the least red tape and regulation," he said.
