New deal for superannuation (letter)

by Robert Bom

News Weekly, April 9, 2005
Sir,

From July 1, 2006, employees under state award systems will get freedom of choice for their superannuation contributions.

This move will help to end the loophole established during the Hawke-Keating governments to mandate and direct employees' superannuation towards union-dominated industry funds.

When they were first put into place, the union funds caused controversy within financial circles, as life insurance statutory funds were used.

The cost and maintenance of the union funds were a heavy burden to life insurance policyholders. Bonuses paid to policyholders were drastically reduced.

Many millions of dollars were being redirected towards the upkeep of the new funds.

Understandably, the unions were happy with the deal, but life insurance policyholders have never been compensated.

The challenge now will be for union funds to publish their fees and charges under a standard formula that will be required from all other superannuation funds.

Robert Bom,
Rockhampton, Qld