17th Jun 2020, 12:44 PM – Senate Treasury Laws Amendment (Your Superannuation, Your Choice) Bill 2019 - in Committee - Choice of fund

The majority voted against amendments introduced by NSW Senator Jenny McAllister, which means they failed.

What was the purpose of the amendments?

Senator McAllister explained that:

As we've made clear in this debate, Labor supports choice in superannuation, but we are committed to making sure that every worker is in a high-performing fund and that adequate information is available to empower consumers with the information they need to make choices that are in their best interests. We are concerned that there is a significant risk that this bill poses to defined benefit offerings, and we're concerned that the effect of this risk will be to lessen choice and to achieve the opposite of what this bill purports to achieve. These amendments specifically address the issues raised by UniSuper when they appeared before the Senate Economics Legislation Committee in its inquiry into the bill. They address issues relating to defined benefit schemes in order to ensure that the bill does not inadvertently threaten the viability of those schemes.

Amendment texts

(2) Schedule 1, item 6, page 4 (lines 3 and 4), omit the item, substitute:

6 Paragraph 32C(6) (h)

Repeal the paragraph, substitute:

(h) an enterprise agreement:

(i) made before 1 July 2020; or

(ii) if the agreement includes a restriction on the choice of superannuation funds—made on or after 1 July 2020; or

(iii) to which subsection (6AAA) applies; or

[choice of fund]

(3) Schedule 1, item 7, page 4 (before line 7), before subsection 32C(6AA), insert:

(6AAA) For the purposes of subparagraph (6) (h) (iii), this subsection applies to an enterprise agreement that provides for an employee to join a fund in relation to which:

(a) the employee is eligible to become a defined benefit member; and

(b) either or both of the following are satisfied:

(i) the governing rules of the fund permit the employee, within a period specified within those rules, to choose not to remain a defined benefit member;

(ii) the employee may choose another fund.

[choice of fund]

(4) Schedule 1, page 4 (after line 16), at the end of the Schedule, add:

8 At the end of section 32F

Add:

(4) A fund (the selected fund ) cannot become a chosen fund for an employee or a person who will become an employee under this section if the person has become or is eligible to become a defined benefit member pursuant to an arrangement of the kind referred to in subsection 32C(6).

9 Subsection 32NA(2)

After "An employer is not required under section 32N to give an employee", insert "or a person who is eligible to become an employee".

10 Paragraph 32NA(2) (a)

After "the employer is making", insert "or will make".

11 Paragraph 32NA(2) (b)

After "the contributions are made", insert "or will be made".

12 Subsection 32NA(9)

After "An employer is not required under section 32N to give an employee", insert "or a person who is eligible to become an employee".

13 Paragraph 32NA(9) (a)

After "the employee is", insert "or will become".

[choice of fund]