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Tuesday, 17 February 1987
Page: 6

(Question No. 946)

Senator Messner asked the Minister representing the Treasurer, upon notice, on 20 February 1986:

(1) Do many union superannuation schemes now being forced on employers and employees, require a management fee or commission of $1 per employee per week to be paid to the union-controlled trustee companies.

(2) Will the union have to account to the members for the use of those commissions.

(3) What controls will be imposed on those unions to ensure that the commissions will be used solely for the benefit of the members.

Senator Walsh —The Treasurer has provided the following answer to the honourable senator's question:

(1), (2) and (3) The Conciliation and Arbitration Commission in its decision of 26 June 1986 decided not to impose by arbitration any occupational superannuation contributions on employers in the next two years. The Commission decided, however, to monitor and regulate agreements entered into and to assist by conciliation.

A requirement of the Commission is that employer contributions should be limited to 3 per cent of ordinary time earnings, inclusive of administrative costs for fund management. The level of management fees, including those payable to any external investment manager, will be a matter for negotiation between the trustees and fund managers. The trustees will, of course, be accountable to the fund members for the operations of the fund.

The announced operational standards, including those in relation to control of superannuation funds, reflect the Government's intention that investments of superannuation funds be directed towards achieving maximum returns to members consistent with the sound management of fund assets.