The Federal Government hopes to restore certainty over the review of default super funds in awards after FSC’s court win last week that ruled the Fair Work Commission (FWC) expert panel process was invalid in its current form. Employment minister Eric Abetz said the decision had put “the review of default award super funds for millions of employees in limbo” until new arrangements could be made. “The govt is currently considering how best to clean up the mess created by [former workplace relations minister] Bill Shorten’s bungled attempt to stack the expert panel,” a spokesperson for the minister told CN. “The govt’s first priority is to deal with the uncertainty that’s been created by the expert panel process being stalled.” FSC took legal action after FWC president Justice Iain Ross appointed himself to the expert panel (CN 1864). On June 6 the Federal Full Court ruled Justice Ross had acted outside his legislative powers and found the panel was incorrectly constituted. FSC CEO John Brogden said: “We have argued from the beginning the expert panel was conflicted and then incorrectly reconstituted.” He said FSC wanted an open, competitive process that allowed every APRA-approved MySuper product to compete for default super contributions. Resource industry employer group Australian Mines and Metals Association (AMMA) wants super removed from industrial awards. AMMA policy and public affairs executive director Scott Barklamb said the battle between retail and industry super funds over default super in awards “has degenerated into a complete mess”. AMMA wanted the Abbott govt to “fix the mess” by removing super from awards altogether, Barklamb said. Industry Super Australia deputy CEO Robbie Campo said the court’s ruling was “a victory for common sense” because it had decided the FWC process for default fund selection – that ensured default funds were chosen on merit – would stand. Campo said bank-owned super funds opposed the default super process in preference for “a free for all” that would enable default products to be sold with sales commissions and other incentives.
First published in Cover Note on 12/06/2014.
Cover Note is the Australian insurance industry’s flagship news service.
For a sample issue, click here.
For more details, click here.