Industry super funds under threat: industry superannuation is one of the great success stories of the Australian trade union movement. But the federal government’s ‘choice of fund’ laws threaten this gain for working families
While the federal government’s assault on workers’ rights through WorkChoices has been well documented, another war, less visible to the public, has been waged on another hard-won employee right.
In July 2005, the Howard government implemented its ‘choice of funds’ legislation, with the aim of undermining the industry super funds.
David Whiteley, CEO of Industry Funds Services, the peak body for industry super funds, said these ideological laws threatened what has been a remarkable union success story.
‘The commercial reality for industry funds is that they face a hostile government and, in the banks and insurance companies, very well-resourced competitors,’ he said.
‘The ideology behind “choice of fund” is to treat super like any other financial service rather than an industrial right. At face value, the concept of having “choice” seems good. But the consequence is that, rather than joining the common industry fund at their workplace, people are forced, over time, to seek financial advice and be sold a super product by a financial planner. This model delivers individuals less super and reduces national savings,’ he said.
Undermining industry funds that have made super both accessible to a larger number of people and delivered enviable returns flies in the face of common sense.
According to SuperRatings–an independent superannuation analyst–for the five years to 31 December 2006, nine of the top ten super funds were industry super funds. The same survey shows that nine of the bottom ten funds are retail (commercial) funds.
David Whiteley said unions have been the foundation of success for industry funds, whether through the leadership of fund trustees or through their advocacy at workplaces.
‘The introduction of industry funds following union campaigns changed the face of national savings in Australia,’ he said.
‘This year, less than 25 years later, there is over one trillion dollars in super. Over half the workforce is an industry fund member. The industry super funds manage around $180 billion of workers’ retirement savings.’
THE DIFFERENCE BETWEEN INDUSTRY SUPER FUNDS AND OTHER FUNDS
* $645,727–retirement benefit for an average worker in an average industry super fund.
* $494,021–retirement benefit for an average worker in a retail fund.
MORE INFORMATION ABOUT INDUSTRY SUPER
* ACTU Super Hotline 1300 362 223; www.actu.asn.au/super
* Industry Super Hotline 1300 881 371; www.industrysuper.com.au
The facts about industry super funds
* Industry super funds were established by unions to give all workers the right to super.
* In 1983, less than 40% of workers had any super and only 25% of women did. Super was the preserve of the managerial classes and the public sector.
* Industry super funds now boast over 5 million members, manage $180 billion of workers’ super and continue to grow.
* Industry super funds have lower average fees than retail funds and don’t pay commissions to financial planners or accountants.
* Industry super funds are run only to profit members.
* Most industry funds allocate up to 10% of their funds to sustainable infrastructure in Australia.
* When buying overseas assets, industry funds evaluate the labour practices of potential targets.
* Industry funds are jointly directed by union and employer directors, appointed in equal numbers.
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