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Competition and fair comparisons best way forward for default super

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Media Release Senator Mathias Cormann Shadow Assistant Treasurer Shadow Minister for Financial Services and Superannuation

12/0411/PK 11 April 2012

Competition and fair comparisons best way forward for default super

The Coalition welcomes the effective acknowledgement by the Industry Super Network that the current process for the selection of default funds under Modern Awards is inappropriate and should not continue.

The current closed shop, anti-competitive process through Fair Work Australia is a national disgrace and should have been fixed up by the government long ago.

It is not transparent, not competitive and inappropriately favours union dominated industry super funds.

With the introduction of MySuper, every product registered as a MySuper product will be certified to comply with the consumer protection requirements enshrined in law by the government.

As such, any MySuper product should be able to compete freely in the default superannuation market.

There is no need for an additional secretive and discredited process through Fair Work Australia to further determine which MySuper products should be included as default funds under various modern awards.

We welcome the ISN’s focus on fund performance.

We need to continue to work towards the most efficient, the most transparent and the most competitive superannuation system possible. Only the most transparent and competitive superannuation system will maximise value for Australians with superannuation - including those with default super.

A lot of work needs to be done to ensure superannuation fund performance is transparently reported and appropriately comparable.

Current APRA data does not allow super fund members or employers to compare the performance of different funds on an ‘apples for apples’ basis.

The Coalition is committed to work with the superannuation industry and regulators to develop industry-wide standard definitions and performance benchmarks which will enhance competition by making it easier to compare funds.

These new industry-wide definitions and benchmarks would include information to help employers, particularly small businesses, in selecting a default fund.

With these standards in place, employers and employees would be in a position to make fully informed choices for themselves by comparing the performance of different funds over time.

There is no reason whatsoever for Bill Shorten to delay reforms in this critical area.

MEDIA CONTACT: Senator Cormann 0411 874 546