Discussion paper

Default superannuation funds in modern awards - issues paper

29 Feb 2012

Compulsory superannuation is a core element of Australia's retirement income system.

In May 2009, the Government commissioned an independent review into the governance, efficiency, structure and operation of Australia’s superannuation system (the Cooper Review). The Cooper Review provided its final report to Government on 30 June 2010.

As noted in the terms of reference for this inquiry (attachment A), a key finding of the Cooper Review was that many consumers do not have the interest, information or expertise required to make informed choices about their superannuation. Most consumers therefore rely heavily on the default superannuation system, with fewer than 10 per cent of workers actively choosing a superannuation fund. The Review recommended the establishment of a new default superannuation product, MySuper.

At present, there are two main ways in which default funds are selected for those who do not choose their own fund:

  • Most modern awards contain a list of default superannuation funds. Where more than one fund is listed, employers choose among those listed. If the award does not include a default fund, employers are free to choose any fund as a default fund. Employers may need to choose different default funds for workers reliant on different awards.
  • For those employed under an enterprise agreement, employers choose the default fund in consultation with employees.

The Government has stated in the terms of reference that it believes that default funds should continue to be included in modern awards.


This issues paper was released on 29 February 2012 and is intended to assist you in preparing a submission to the Commission. It covers a range of issues on which the Commission is seeking information and feedback.

Initial submissions are due by Thursday 5 April 2012.

Read more about Making a submission >>

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