ASIC admits it has super worries about employee on-boarding
The Australian Securities and Investments Commission (ASIC) has admitted that companies which direct employees towards particular superannuation funds via on-boarding programs could be undermining consumer protections and the superannuation stapling regime.
Answering questions on notice from Senate Estimates, ASIC confirmed that it had actually raised its concern with the Treasury.
It noted that some employers use human resources platforms or payroll providers to assist with employee onboarding and that “some of these providers have arrangements with superannuation trustees to advertise or promote superannuation products within the employee onboarding software”.
“This advertisement or promotion is typically shown at the point at which the new employee may, optionally, choose a super fund to receive employer contributions,” it said.
In answer to the question of whether this risked undermining consumer proections and super stapling, ASIC answered: “Potentially yes”.
“Advertising that occurs as outlined above could steer employees away from other possibly more appropriate options: to keep their existing fund, be stapled to a previous fund or join the default fund at their workplace,” the ASIC answer said.
“Based on our analysis to date, advertising in this manner is not per se a contravention of any law ASIC administer,” ASIC said but then said that “particular provisions of the law may be contravened in particular instances (for instance, if the advertisement were misleading).”
“We have raised concerns about the potential impact on consumers of this practice publicly and with Treasury,” ASIC said.
This is a large part of the reason union super funds are such big football sponsors. It gives them lots of match tickets and corporate hospitality to entertain HR gatekeepers and influencers.