Unions criticise proposal to break IR-funds link

Unions have branded a proposal to break the link between the super and industrial relations systems as ‘ideological fanaticism’.

ACTU president Michele O'Neil. Picture: Hollie Adams

Unions have branded recommendations that would break the link between the superannuation and industrial relations systems as “ideological fanaticism” in a critique backed by Labor, which ­accused the government of pursuing a vendetta against union-linked industry funds.

The Productivity Commission’s call for a new top-10 list of default funds to be determined by an ­expert panel every four years would end unions’ ability to influence default funds through industrial awards, while employers would also be unable to sign new starters on to preferred funds.

ACTU president Michele O’Neil said the recommendation, which the Productivity Commission said could save average workers $165,000 by retirement, would hand “a huge amount of power” to financial regulators who could ­select the top 10 funds.

“The recommendation to rem­ove superannuation from the IR system is completely unacceptable and shows the ideological fanaticism which underpins this report,” Ms O’Neil said.

“The proposed changes would block working people from being represented in the system which manages their money, while handing a huge amount of power to ­financial regulators, which the ongoing banking royal commission has demonstrated are grossly ineffective at shielding working people from banks which regularly put profit before their own customers.”

Any attempt to dismantle the system “would inevitably damage the performance of these funds”.

The Financial Services Council strongly endorsed the Productivity Commission’s recommendation to decouple the superannuation and industrial relations systems.

“Putting choice into the hands of consumers should be the cornerstone of a modern superannuation system,” FSC chief executive Sally Loane said. “Giving consumers just one default fund that they can take from job to job will put an end to the endemic problem of multiple accounts — helping ensure members’ retirement savings aren’t being unnecessarily eroded.”