Industry Super Australia

Regulator can’t penalise enticing default super fund switching

Industry Super Australia has obtained legal advice which says regulators have no power to seek a civil penalty from banks unlawfully offering incentives to persuade employers to switch default superannuation funds to a bank-owned fund.

“The law (SIS Act section 68A) prohibits a bank from offering business banking discounts and other incentives to employers in exchange for access to employees’ superannuation,” said David Whiteley, Chief Executive of Industry Super Australia (ISA).

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Raising age pension and super preservation ages ‘last resort’

Industry Super Australia, superannuation tax concessions, age pension age, superannuation preservation ageIndustry Super Australia Chief Executive, David Whiteley, has said that raising the age pension or superannuation preservation ages should be a last resort, but the superannuation tax concessions do need reform.

Mr Whiteley told the Australian Workers Union National Conference that the aging of the population is one of the key economics challenges for Australia, and superannuation is a central part of the solution. However the significant costs of the superannuation tax concessions must be addressed.

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Banks give benefits to employers to switch default super funds

New research released by Industry Super Australia (ISA) shows that banks may be offering benefits to employers to encourage them to switch default superannuation funds.

The survey of 550 small and medium businesses, conducted by UMR, showed that “26% of employers surveyed said that a major bank had approached them about transferring their employees’ default superannuation to the bank’s own retail super fund in the last year,” according to the ISA.

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Financial Services Council rejects super safety net claims

In response to claims by Industry Super Australia that recent reviews of the superannuation system had supported the current system for choosing default superannuation funds the Financial System Inquiry has written a letter to the editor of The Australian:

Re: End default super battle, retail funds told

Industry Super Australia’s claim that “a series of reviews had already endorsed existing arrangements” for default superannuation under Modern Awards is wrong. (”End default super battle, retail funds told”, The Australian, February 5). The reviews have in fact been critical of the role of the Fair Work Commission in selecting default funds.

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Industry super funds outperform retail funds over 10 years

Industry super funds consistently outperform bank-owned retail super funds, Industry Super AustraliaIndustry super funds have consistently outperformed retail super funds over 1, 3, 5, 7 and 10 year periods, according to Industry Super Australia, based on data from SuperRatings.

Over a 10 year period the statistics show that industry super funds have outperformed “bank-owned funds” by 1.66%, 6.75% to 5.09%.

The difference is smaller for 1 year returns, with industry funds earning 8.30% and retail funds 7.75%, or 0.55% lower.

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Superannuation not simply another financial product: ISA

Industry Super Australia (ISA), competition review, default superannuation fundIndustry Super Australia has said that “superannuation not simply another financial product,” in a submission to the Competition Policy Review.

“Competition in the superannuation industry is threatened by the market dominance of large banking corporations that provide a range of integrated services, including superannuation.”

Industry Super Australia (ISA) says the superannuation system contains “significant market failures,” and this means “default superannuation arrangements should be free from anticompetitive trading arrangements which also negatively impact on member retirement incomes.”

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Superannuation battle lines drawn ahead of FSI final report

Financial System Inquiry (FSI), Industry Super Australia, Financial Services CouncilThe battle lines have been drawn between Industry Super Australia and the Financial Services Council ahead of release of the Financial System Inquiry (FSI) final report.

Industry Super Australia CEO David Whiteley says the superannuation sector is at a “crossroads.”

“The banks are lobbying hard to scrap the safety net and replace it with a system designed to suit their vertically-integrated business model, which is geared towards profits and dividends to shareholders.”

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Super safety net under threat from changes to default super

Industry Super Australia Chief Executive David Whiteley has used a speech to the National Press Club to argue that the superannuation safety net is under threat.

The National Press Council on Wednesday was the latest forum for the continuing fight between the Financial Services Council and Industry Super Australia over default superannuation funds.

Opening the speeches David Whiteley said that “the heart of our super system has been the default super safety net.”

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