ACTU urges review of ‘default funds’
THE heads of superannuation funds are being urged to review their default fund arrangements with “dodgy banks”, in the wake of the scandals uncovered by the financial services royal commission last week.
It comes after the postal and telecommunications union last week co-signed a letter to Australia Post chief executive Christine Holgate asking her to review the company’s default super fund offering, and urged members to seek urgent financial advice regarding AMP superannuation.
New employees at Australia Post who do not nominate a super fund choice are automatically enrolled in a default fund managed by AMP, according to the union. Last week AMP admitted it had charged customers fees for financial advice that was never delivered, and also repeatedly lied about its behaviour to the Australian Securities and Investments Commission (ASIC). The wealth management giant faces possible criminal charges after the commission heard it deliberately and unlawfully continued charging fees to “orphan” clients — those who no longer had an adviser — for three months despite them not receiving any service.
AMP shares have been in a free fall since it began giving testimony at the royal commission last Monday, and has shed more than $1.8 billion in market value. The Australian Council of Trade Unions on Monday called on chief executives of industry super funds to reconsider their commercial relationships with financial institutions following the “corrupt and unethical behaviours” revealed in the royal commission.
In a letter sent to fund bosses, ACTU secretary Sally McManus said she has been appalled by the “outrageous and illegal behaviour” revealed in the royal commission which has included charging dead people for non-existent financial advice and ignoring and covering up fraud.
“Working people in Australia gave up pay rises in order to get universal superannuation off the ground to provide access to a dignified retirement for everyone,” Ms McManus said. “The retirement savings of working people should not be used to prop organisations that house rotten, corrupt and unethical behaviours like those revealed over the past weeks at the banking royal commission.”