Govt restates default funds timetable

The Federal Government has restated the time-frame around its move to open up default funds under modern awards, with Assistant Treasurer, Kelly O'Dwyer citing changes to enterprise agreements and workplace determinations from 1 July, next year.

O'Dwyer used an address to a Financial Services Council (FSC) function in Sydney to reinforce the Government's determination to pursue changes to the default funds regime.

She claimed it was "critical that people are able to make retirement savings decisions that are best for them and their future".

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"Around two million Australians are currently stopped from choosing which fund their compulsory employer superannuation will be paid into because they are covered by an enterprise bargaining agreement or workplace determination," O'Dwyer said.

"The Government will extend choice of fund arrangements to more employees under enterprise agreements and workplace determinations made from 1 July 2016, consistent with the recommendation of the Inquiry [Financial System Inquiry]."

The minister said that not having choice of fund could result in employees having multiple funds.

"This means employees can end up paying multiple fees and insurance premiums, reducing their retirement income. More choice will promote member engagement, and reduce fees through greater competition," she said.

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