ACTU defends union directors on super funds
Australia’s peak trade union body, the Australian Council of Trade Unions (ACTU), has hit back at a Senate Committee report which has recommended imposing more independent trustee directors on the boards of industry superannuation funds.
The ACTU has responded by stating that not only have industry funds out-performed retail funds but that the majority of Australians have chosen to trust their retirement savings to such funds.
The ACTU said the Senate Committee report, substantially authored by the committee chair, NSW Liberal Senator, Andrew Bragg, represented another attempt by the Coalition “to destroy the super system that Australians value”.
“The majority of Australians trust their retirement savings to the super funds with worker representatives on their boards,” ACTU assistant secretary, Joseph Mitchell said. “Outlawing that option is insulting to the millions who want their super to priories their interests over the interests of corporate shareholders.”
“This proposal is further evidence that Peter Dutton and the Coalition are unashamedly on the side of the big banks, not workers. When super funds allow workers to have a seat at the table, the evidence is clear, they generate higher returns – worth more than $190,000 in retirement savings. Banning workers’ voices is a direct threat to the financial security of millions of Australians.
“It’s increasingly clear that Peter Dutton and the Coalition are a risk to workers’ wages, and their retirement.
““This is just the latest in Peter Dutton’s destructive record on super. The Coalition froze the legislated increase to the Superannuation Guarantee, voted against making super theft a crime, forced Australians to drain their super to get by during the pandemic, and now they want to force people to drain their super to put a roof over their heads,” Mitchell said.
“Instead of proposing reforms to close the gendered retirement gap and guarantee a comfortable retirement for every Australian, the Coalition is only interested in dismantling Australia’s world-class retirement system,” he said.
Australia’s retirement system is certainly world class, and we should rightly be proud of its being so. So too, have Industry Funds done a reasonable, though not outstanding job. But to say the majority of Australians have chosen to put their trust in Industry Funds ignores the fact that they were effectively coerced into joining by lack of education exacerbated firstly by the despicable ‘Compare the Pair’ misinformation campaign, and secondly by the equally despicable attack on Financial Advisers by ASIC (no doubt encouraged by Unions and Industry Funds), effectively resulting in a denial of information, education and therefore choice for that majority of Australians. There are significantly better options than Industry Funds.
People didn’t choose they were force to be with their super fund by the employer and they couldn’t leave contributions had to be paid to that fund or were forced to leave money like they did in qsuper, rest and uni super. Rest super is the only fined super fund so far.
Hi Jack
Insightful – What I would like to know is more about compare the pair comment and the coerced comment.
What I find interesting from the 2024 FY is how the super fund have recorded 20% plus returns for the past two years – so reported , but I am seeing clients with privately managed portfolios with negative returns of 10% over the past two years (Capital value). I have not had time to find out more but would like your insights. Thanks.
What a silly comment John. That example would be very much in such a minute minority tarring privately managed portfolios (if its even true). I feel you are bringing it up because either you’re paid by ISA or not very good at understanding the whole investment landscape.
No matter what you were in the last 2 years you’d be quite positive if you held a broad range of investments
Easy to “outperform” retail funds when you get to market your own homework…
What did you expect the ACTU to say?
I’d be taking this ‘self interested’ drivel with a grain of salt.
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Let’s hypothesize that we could re-start super from scratch beginning tomorrow.
Would we use the model we currently have?
No…. No way.
In my opinion, there are too many potential and massive conflicts of interests between legislators, Unions and super trustees.
The current Governance model is archaic and increasingly difficult to defend.
Time for a Royal Commission.
Would that be be the funds that
NOTHING TO SEE HERE!
Let’s take a step back here ……. which super funds are currently copping major fines, enforcement undertakings, etc. Australian Super, CBUS, REST, etc. It always pays to keep records of past events and then you will get the picture
What a joke – surprise, surprise, the ACTU is supporting Industry Funds – with lies about their performance, their looking after only the members whilst they spend millions on political donations to the Labour Party, Sporting team sponsorships, sports grounds naming rights. Also being fined for slow payments in death claim benefits etc etc etc – Keep going Senator Bragg as you are the only one taking them to task.
The statement that members chose to be in industry funds is false. Most did not. In the early days of compulsory employer super the Labor Government laws mandated that workers in certain industries must have their super contributions paid to specific industry super funds. They and their employers had no choice. The members did not apply to be members of those funds. Having been put in the funds natural inertia meant they stayed there. Similarly, after employees were given a choice and industry funds weren’t compulsory, employer pay offices continued to take the easiest course of action and pay to the funds they already had connections with. That is why industry funds have become so large.
Industry funds have performed well in the past. The only major difference between what they and other funds invest in is their high level of unlisted, illiquid assets. Now that ASIC and APRA have been subjecting them to intense scrutiny about their valuation methods and accuracy it will be very interesting to see if they continue to perform as well. The figures for the last 12 months suggest they haven’t done as well recently.
There is no evidence that co-operatives and not-for-profits outperform for-profit businesses. Think of life insurance mutuals, healthcare funds, agricultural co-operatives. In fact the evidence suggests for-profit businesses perform better long term.