03 March 2015
Industry superannuation funds ignore their own failings to pursue others
There is some concern from the industry superannuation funds that small business owners have been approached by the major banks and offered benefits to change their staff default super funds. Inducements may have included discounted fees, viagra order lower insurance premiums, shop lower interest rates and free tickets to sporting events. This is all according to a survey by UMR Research commissioned by Industry Super Australia.
The financial regulators are investigating these claims.
This is a smokescreen from the industry funds and unions who are intent on defending their super monopoly. Many unions receive significant financial benefits from industry funds which are protected from competition under industrial awards. These unions are desperate to keep their rivers of gold flowing from industry super funds.
Let’s face it, cheap there is apparently a rule for the banks and a different one for the industry super funds. The industry superfunds have been scamming small business people for over 20 years but that has never been investigated by the financial regulators.
For too long industry superannuation funds have treated small business people like slaves. We have no choice but to use industry super funds if our employee selects that fund or if it is in the relevant industrial award. We are forced by law to use suppliers we know are inefficient and compromised by their corporate structures. They live high on the super hog by forcing us to use the administratively and organisationally challenged industry funds, against our will.
Industry funds act like a protected monopoly; they constantly lose employee and employer records, they threaten employers with legal action for events that have not taken place, they are run and managed by boards consisting of union and big business representatives even though 96% of the businesses that employ their members are small. Their communications with small business is unwieldy; a waste of paper; a waste of money for postal costs; and written by bean counters for bean counters. There is no respect for the small business person who collects their money, just shams and scams. We have no choice but to use these monopolies.
They use smoke and mirrors to hide their scams. For example they will inform small business people in very legal looking letters that they are “required” to pay monthly when they can actually pay quarterly. This can have a huge impact on cash flow management. The industry funds threaten legal action to recover money that has never been due but the threat will hopefully force the small business person to do their administration for them.
They have now spent their members’ funds on a survey to help shore up their industrial award driven monopolies. They gather information that helps maintain the current situation when they would be better off making it easier for the people that collect their funds, the small business person.
Let’s name some of these funds who between them have hundreds of billions of dollars of people’s retirement funds. They are REST, HESTA, Australian Super, HOSTPLUS and many others. Inefficient communicators and record keepers every one of them.
The way to fix this is to remove the employer as the collector of superannuation and put super in PAYG. Then let the person who owns the money work it all out with the ATO and the superannuation funds. That way the industry funds can’t scam us and there is no need to market superannuation to employers because it will be none of our business.
The other side benefit of taking us out of the system is we can become more efficient by focusing on our business instead of someone else’s business; isn’t increased job security a better outcome for the members of industry super funds?
Finally the group of directors who should also hang their heads in conflicted shame are those from big business who sit on industry superannuation fund boards. Do they not recognise the problems they create? Do they care about the small business person?