Executive Summary

Since its formation in 1927, the Australian Council of Trade Unions (ACTU) has been the peak trade union body in Australia.  There is no other national confederation representing unions.  For 90 years the ACTU has played the leading role in advocating for workers for the improvement of wages, conditions and social welfare.

The ACTU consists of affiliated unions and State and regional trades and labour councils.  There are currently 43 ACTU affiliates. They have approximately 2 million members who are engaged across a broad spectrum of industries and occupations in the public and private sector.

The ACTU and its affiliated unions founded industry superannuation and won the right for all workers to be entitled to super. The ACTU continues to be a leader in the superannuation sector, advocating to ensure workers retain their rights over their deferred wages, and that superannuation delivers adequate retirement outcomes for workers.

The Government’s Protecting Your Super package is one which crudely approximates a solution to the problem of multiple accounts, account erosion, and inappropriate insurance coverage. Most worryingly, the Bill will be highly destructive to workers who need insurance through their super. Workers in high-risk occupations rely upon insurance for themselves for their dependents should the worst happen.

The ACTU believes that with significant amendments a positive solution to systemic fee erosion can be found.

The ACTU believes:

  • Schedule 1 must be amended such that the regulator more rigorously defines passive fees, to encompass investment fees along with account fees so the industry more consistently applies the fee cap.
  • Schedule 2 must be amended to ensure that young workers and those with low account balances working in industries with high-risk of injury, death and permanent disability are not denied insurance;
  • Schedule 2 must be amended to allow the regulator to define an inactive account so that those who are active in the maintenance of their account but are not making contributions are not denied the benefits of holding that account;
  • Schedule 2 must be amended to ensure that those who have taken parental leave are not made to reapply for insurance for a lapsed account which they wish to reactivate upon their return to work;
  • Schedule 2 must be amended to ensure that those who take a break from work and acquire a disability, chronic illness or injury are not punished for allowing their insurance to temporarily lapse;
  • Schedule 2 must be amended to ensure those changing jobs and industries are not lacking appropriate coverage for the period when they hold a new account accumulating to $6,000;
  • Schedule 3 must be amended to ensure that the member is notified by the ATO when their superannuation balance is transferred to the Commissioner;
  • Schedule 3 must be amended such that the ATO should find an appropriate account before taking custody of the account, or determine that the member would be better off for the ATO holding the account and returning the cash rate, rather than immediately receiving the funds; and,
  •  Schedule 3 should be amended to prescribe a maximum timeframe for the Commissioner to transfer the superannuation to the most appropriate account, and should no account be found or nominated the member is notified immediately and regularly (at a 6-month interval).