In a submission filed as art of the Senate Economics Legislation Committee’s inquiry into the Government’s legislation changing default superannuation arrangements, Equity Trustees said the legislative changes did not go far enough.
“The continued operation of default funds and the lack of compulsion for employees to select their own superannuation fund may perpetuate disengagement and multiple accounts (and the knock-on implications of increased fees and insurance costs to superannuation members),” the submission said.
“Equity Trustees would make the case that the whole superannuation system should be based on a foundation of requiring all employees to exercise choice of superannuation fund.”
The submission said that given that the superannuation guarantee had now moved beyond its origins as an employee benefit to a legislated requirement, the employer’s role in selecting default funds for its employees had become redundant.
“Likewise, having any other agent select default funds exposes the employee to the interests of those bodies without any legislative protection requiring those bodies to act in the member’s best interest,” it said.
“Equity Trustees would therefore propose further legislation is enacted to ensure all employees are provided the opportunity to select a superannuation fund.”