The quality filter is overseen by a panel of the Fair Work Commission and narrows the 120 MySuper products down to between two and 15 funds for employers.
In an announcement released yesterday, Industry Super Australia (ISA) estimated the proposed removal of this quality filter by the Productivity Commission would add a minimum of $160 million in “unnecessary red tape costs” for employers of all sizes, since employers will be required to “undertake the appropriate due diligence” in selecting a super fund for their employees.
"By applying quality filters to the 120 MySuper funds, so that employers can choose from up to 15 of the best in an award, employers and employees can have confidence that the fund chosen is a top performing fund", said ISA chief executive David Whiteley.
Mr Whiteley said the removal of the filter would also place “unreasonable search costs on employers”.
"Employers have consistently stated that they do not want the responsibility of choosing the default super fund for their employees, nor necessarily have the time of expertise,” he said.
The ISA believes removing the quality filter will reduce competition on long term net investment returns given this is the focus of the filter.
The ISA, along with the Australian Institute of Superannuation Trustees (AIST) has also asked the government to retain the representative trustee system and has requested that trustees boards being given greater capacity to appoint up to one third of independent trustees if a board considers this to be in the best interests of their members.
The ISA said it supports the “adoption of the ASX definition for independent trustee directors, achieving greater alignment between definitions as proposed by the government”.
