Blast for super top-10 plan

RETAIL and industry super funds have hit out at a Productivity Commission call for an expert panel to compile a list of 10 best-performing superannuation funds to act as default funds.

The commission’s suggestion would impact billions of dollars flowing annually into default funds and separate super from the workplace relations system.

The Financial Services Council, which represents forprofit retail funds, did however welcomed the commission’s suggestion to end having the Fair Work Commission or employers select default funds.

“The Productivity Commission’s overarching recommendation, to take the decision for allocating the $17.5 billion in annual default funds out of the hands of unions and employers and put it into the hands of consumers deserves support in a modern, flexible workplace,” council chief Sally Loane said.

But Ms Loane said she had “strong reservations” about the suggestion to set up an independent expert panel to select a shortlist of 10 “best-in-show” funds to serve as default funds.

Setting a prescribed number of default funds was “not optimal” and there were concerns any expert panel “could be politicised”, Ms Loane said.

Industry super funds also took aim at the suggestion, saying changing the current system would be high-risk and could lock disengaged young workers into a fund for life.

The suggestion aims to stop disengaged workers having their super eroded by being enrolled in — and paying fees to — more than one fund.