Banks ‘offer’ illegal rewards to control retirement funds
Australia’s big banks have been accused by a superannuation rival of offering unlawful inducements to employers in exchange for control of workers’ superannuation.
Research conducted for Industry Super Australia, the umbrella organisation of the industry super movement, said some banks were offering discounts, tickets to sporting events and even iPads if employers handed over control of their workers’ default superannuation funds.
Banks and insurance companies are allowed to compete for default super fund management rights, but are prohibited by law from offering inducements.
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The 1993 Superannuation Industry (Supervision) Act stated the trustee of a regulated super fund must not “offer to give or allow a discount, allowance, rebate or credit” to win business.
Industry Super Australia chief executive David Whiteley confirmed to The New Daily that the allegations have been referred to regulators ASIC and APRA, which oversee the financial industry.
Workers could suffer if their superannuation has been switched into inferior funds because of the alleged incentives, Mr Whiteley said.
“This could result in employees’ super contributions being paid into under-performing bank-owned super funds,” he told ABC radio.
“It could mean the people may retire with less, they may have to top their super with their own wages, or of course they could find themselves working longer, perhaps even past 70.”
The survey conducted by UMR Strategic Research of 550 small to medium businesses found that just under half had been offered benefits to switch funds.
The most common offers were direct benefits to the business, not employees, with the majority of employers surveyed admitting that the incentives had the potential to influence their decision.
The survey did not name specific banks, but said two major companies were “the most active”.
The Australian Bankers’ Association has declined to comment on the allegations.
https://soundcloud.com/peterryan-3/abcs-peter-ryan-banks-offering-inducements-to-employers-to-switch-super-funds
Disclosure: The New Daily is backed by members of the Industry Super Funds network, including Australian Super, Cbus and Industry Super Holdings.