Uni's younger staff subsidise old guard

Failing federal government intervention, university employees will continue to be denied freedom of superannuation fund choice. Under the 2005 choice legislation, employers andunions are able to bargain away employees’ right to choose their superannuation fund under an Enterprise Bargaining Agreement.

In the latest negotiations with the National Tertiary Education Union, all tertiary sector employers have agreed to or are close to finalising EBAs that preserve the UniSuper monopoly intact.

This is despite concerns about the future finances of the Defined Benefit Division fund, because employers will not commit to meet any funding shortfalls.

The UniSuper industry fund structure is unique, with the ownership and control of the fund firmly in employer hands. All other industry funds have equal representation of employer and union representatives, while only the general secretary of the NTEU and chief negotiator of the EBAs, Grahame McCulloch, and Neville Kitchen, from SA Unions, are on the UniSuper board.

The outcome of the EBA negotiations and the 2013 Trustee decision to reduce future DBD benefit accruals for employment after January 1, 2015 prove that the vice-chancellors and UniSuper bureaucracy are totally in control.

The EBA negotiations provided the NTEU with the opportunity to negotiate an end to the situation where all university employees are forced to use a UniSuper fund and especially a DBD with major inequities in its basic design, and where trustees can reduce the payouts promised to members.

Responding to my latest e-book analysing these and other issues, the UniSuper chief executive questioned my motives in writing about the DBD. This suggests that UniSuper does not welcome detailed independent technical scrutiny of a fund which has close to 80,000 members.

The commonwealth’s attitude was totally different when my 1990 book Look Before You Leap compared its then new PSS funds with the earlier (CSS) fund it replaced. Both employers and members welcomed this independent comparison of these defined benefit funds.

How the universities as employers and the NTEU on behalf of employees can support the continued use of the DBD as their default fund for new full-time employees defies rational explanation. The DBD designed in 1982 focused on lifetime university employment, penalising members who left at earlier ages.

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Daryl Dixon

Executive Chairman

Daryl Dixon is one of Australia’s foremost investment experts and a well known writer and consultant. He has provided trusted advice to thousands of personal clients over more than 25 years and is an acknowledged expert in the areas of tax, superannuation (including public sector superannuation), social security and investments.

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