More Employees To Be Given Choice of Super Fund

The Federal Government has introduced legislation into Parliament to allow more employees the option to choose their superannuation fund.

The Minister for Small Business and Assistant Treasurer the Hon Kelly O’Dwyer has introduced legislation into Parliament to allow employees the option to choose their superannuation fund.

“Currently around two million employees do not have the opportunity to choose the fund into which their compulsory employer contributions are paid,” Minister O’Dwyer said.

“A common way this can occur is through enterprise bargaining agreements and workplace determinations, which may mandate a given super fund. The Turnbull Government recognises it doesn’t make sense to force employees to save money in superannuation but then leave key decisions about how it is managed outside their control.”

It is worth noting, of course, that many workers have had choice of superannaution fund for more than a decade. In July 2005, legislation came into effect to enable many Australian workers to actively choose the superannuation fund into which their super contributions (SG) would be made.

“It is expected these changes will extend choice to up to 800,000 employees who currently do not have choice of fund under enterprise agreements and workplace determinations.

“These changes implement the Government’s response to the Financial System Inquiry (FSI) recommendation,” Minister O’Dwyer said.

Legislation Matches FSI’s Recommendation

The Financial Services Council (FSC) has called the reforms an important step to allow all APRA approved MySuper funds to compete on a level playing field for superannuation consumers.

Sally Loane, CEO of the Financial Services Council said, “The legislation is consistent with the FSI recommendation that individuals be allowed to choose their own superannuation fund.

“The Government should be applauded for working towards a transparent and competitive superannuation system that empowers consumers.

“The FSC supports removal of the anti-competitive role of the industrial relations system in selecting default funds.”

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