The Federal Government has been urged to impose a deadline on employers, unions and superannuation funds to ensure members are given choice of fund once industrial agreements expire.
The Financial Services Council (FSC) has used a submission to the Senate Economics Legislation Committee to argue for amendments to the Treasury Laws Amendment (Your Superannuation, Your Choice) Bill 2019 to achieve such a deadline.
While broadly supporting passage of the legislation, the FSC said it needed to be amended “so that all employees on existing or expired agreements must be granted choice of fund by a certain date, for example one year after royal assent, to provide certainty to employers and ensure workers are not disadvantaged”.
The FSC signalled its strong opposition to the grandfathering of existing workplace agreements.
“It should not be acceptable for employees to continue to be disadvantaged by allowing existing agreements to remove employees’ right to choose a superannuation fund,” it said.
“The FSC is concerned that the grandfathering of existing workplace agreements in the Bill is open ended, particularly as enterprise agreements are entitled to continue to operate beyond their nominal expiry date. All employees covered by agreements should be entitled to prospectively exercise choice.”
The FSC said it needed to be noted, however, that its recommendation to enable employees currently covered by an enterprise agreement to exercise choice of fund was only intended to apply prospectively.
“Further, only a subset of employees will take up this option, those who have been wanting to change funds but until now have been prevented from doing so.”