Retirement
Unions and independence: The super paradox
Unions exist to benefit members, but a requirement for union representation could have left Energy Super members $20 million worse-off, the royal commission has heard.
Unions and independence: The super paradox
Unions exist to benefit members, but a requirement for union representation could have left Energy Super members $20 million worse-off, the royal commission has heard.
Energy Super chair Scott Wilson told the royal commission on Friday of how a potential merger between Energy Super and Equip Super was scuppered due to conflicts over board make-up.
The benefits of this merger for members could have been as much as $20.5 million, KPMG analysis found. It also could have delivered savings for members of up to 0.15 per cent through enhanced scale.
However, Energy Super required a board featuring union representatives, while Equip Super preferred to build a “skills-based board” made up of member and employer representatives, with the remaining third determined through a skills test.
Speaking to the commission, Mr Wilson said he believed from the start the merger wouldn’t get across the line due to Equip Super’s sentiment towards union-nominated directors.
Ultimately, Energy Super and Equip Super reached a stalemate; the merger would only go forward provided Equip Super allowed the board to feature union-nominated directors.
Questioned on whether this barrier protected or damaged members’ best interests, Mr Wilson said the interests of super members and unions are “indistinguishable”.
“What do unions do around superannuation? We won it. We won it in the '80s through awards. So superannuation is very, very important to unions,” Mr Wilson said.
“It just so happens when we talk about superannuation funds that the interests of unions and the interests of members of the funds are so aligned as to be indistinguishable. It’s what we do.
“We look after members’ money through the accumulation and into retirement. If we can’t be guaranteed that an anti-union employer-based fund is going to allow to have union representation on their board going forward, what’s going to happen to our members in far north Queensland, what’s going to happen to our members in Cairns and Townsville? Who is going to service them?”
Equip Super went on to merge with the former Rio Tinto Staff Superannuation Fund. According to an Equip Super statement, this merger has reduced member fees and premiums by $12 million.
Nest Egg’s ongoing coverage of the royal commission continues here.
RELATED ARTICLES
Superannuation
Superannuation guarantee rate rises to 12 per cent as parental leave changes take effect
The superannuation guarantee rate has increased from 11.5 per cent to 12 per cent from Tuesday, with super contributions also being added to Commonwealth Parental Leave Pay for the first time. Read more
Superannuation
Rest's Sustainable Growth option achieves highest sustainability classification
Rest superannuation fund has achieved the highest sustainability classification for its Sustainable Growth investment option from the Responsible Investment Association Australasia. Read more
Superannuation
Aware Super slashes admin fees for retirees by up to 25 per cent
Aware Super has reduced administration fees for members with a retirement income account by up to 25 per cent and lowered the maximum annual fee. Read more
Superannuation
SuperAPI co-founder criticises Labor's superannuation tax as 'sneaky tax on young people'
The co-founder of SuperAPI has labelled Labor's proposed tax on superannuation balances above $3 million as a "sneaky tax on young people, tomorrow" disguised as a policy targeting wealthy retirees ...Read more
Superannuation
Election policies could reshape Australia's superannuation landscape, expert warns
Competing superannuation policies from Australia's major political parties could have significant implications for investors and retirees, according to a financial expert. Read more
Superannuation
Industry leaders weigh in on concessional super tax as Budget confirms $55bn investment
Changes to the taxation of superannuation earnings and contributions have drawn mixed responses from financial and payroll sector leaders, as the Federal Budget confirms over $55 billion in ...Read more
Superannuation
Call for indexation on super tax cap as $3m threshold draws criticism
A senior executive in the superannuation technology sector has criticised the Federal Government for failing to index the proposed $3 million superannuation tax cap, arguing the measure will unfairly ...Read more
Superannuation
Rest members back calls for fairer superannuation rules ahead of Federal Budget
Rest has called on the Federal Government to implement superannuation reforms aimed at improving fairness across the system, after member survey results showed strong support for a range of proposed ...Read more
Superannuation
Superannuation guarantee rate rises to 12 per cent as parental leave changes take effect
The superannuation guarantee rate has increased from 11.5 per cent to 12 per cent from Tuesday, with super contributions also being added to Commonwealth Parental Leave Pay for the first time. Read more
Superannuation
Rest's Sustainable Growth option achieves highest sustainability classification
Rest superannuation fund has achieved the highest sustainability classification for its Sustainable Growth investment option from the Responsible Investment Association Australasia. Read more
Superannuation
Aware Super slashes admin fees for retirees by up to 25 per cent
Aware Super has reduced administration fees for members with a retirement income account by up to 25 per cent and lowered the maximum annual fee. Read more
Superannuation
SuperAPI co-founder criticises Labor's superannuation tax as 'sneaky tax on young people'
The co-founder of SuperAPI has labelled Labor's proposed tax on superannuation balances above $3 million as a "sneaky tax on young people, tomorrow" disguised as a policy targeting wealthy retirees ...Read more
Superannuation
Election policies could reshape Australia's superannuation landscape, expert warns
Competing superannuation policies from Australia's major political parties could have significant implications for investors and retirees, according to a financial expert. Read more
Superannuation
Industry leaders weigh in on concessional super tax as Budget confirms $55bn investment
Changes to the taxation of superannuation earnings and contributions have drawn mixed responses from financial and payroll sector leaders, as the Federal Budget confirms over $55 billion in ...Read more
Superannuation
Call for indexation on super tax cap as $3m threshold draws criticism
A senior executive in the superannuation technology sector has criticised the Federal Government for failing to index the proposed $3 million superannuation tax cap, arguing the measure will unfairly ...Read more
Superannuation
Rest members back calls for fairer superannuation rules ahead of Federal Budget
Rest has called on the Federal Government to implement superannuation reforms aimed at improving fairness across the system, after member survey results showed strong support for a range of proposed ...Read more
