Redundancies in Superannuation Funds

By Alan J. McDonald

The burgeoning income of superannuation funds has not been enough to stop redundancies occurring in superannuation funds. These redundancies are not well publicised, but McDonald Murholme is noticing increasing use of redundancy to terminate the employment of superannuation workers.[1]

Mr McDonald, managing director of McDonald Murholme, said it is very hard to justify redundancy in a superannuation fund when money is pouring into all funds so that they now control trillions of dollars. There are also governance and management issues in prominent funds such as Cbus[2] and AustralianSuper[3]. Where good employees raise governance issues out of concern for their fund, they are sometimes subject to adverse action, resulting in termination of employment, in breach of the Fair Work Act 2009 (Cth). Anyone losing their job at a superannuation fund may not find such a valuable position in any other sector.

The superannuation fund EBAs have outstanding conditions of employment, not merely generous remuneration for employees. The threatened loss of a job in a superannuation fund must be viewed suspiciously because funds are growing rapidly every year, and with that growth brings many opportunities. Of course, if there are governance problems, such as with AustralianSuper,[4] the CFMEU,[5] or ESSSuper,[6] good employees can sometimes lose out as a result of the poor performance of others. The law protects good employees, especially in superannuation funds under highly beneficial EBAs.

Superannuation fund employees would be wise to take advice on any proposed redundancy.

In the future, there will be greater challenges for superannuation funds because the American stock market is far outpacing the Australian stock market, and Australian commercial property. So where will the trillions of dollars in Australian funds be placed?

[1] Sarah Thompson, Kanika Sood and Emma Rapaport, ‘Jobs go as troubled industry super giant Cbus rolls out restructure’, Australian Financial Review (online, 30 October 2024) <https://www.afr.com/street-talk/jobs-go-as-troubled-industry-super-giant-cbus-rolls-out-restructure-20241030-p5kmm6>.

[2] Hannah Wootton, ‘Cbus’ staff turnover, governance ring alarm bells, says Morningstar’, Australian Financial Review (online, 29 October 2024)<https://www.afr.com/policy/tax-and-super/cbus-staff-turnover-governance-ring-alarm-bells-says-morningstar-20241029-p5km4s>.

[3] Max Mason and Hannah Wootton, ‘CFMEU official used super fund money to help union, alleges APRA’, Australian Financial Review (online, 6 September 2024) <https://www.afr.com/companies/financial-services/apra-alleges-senior-cfmeu-official-used-super-fund-money-to-help-union-20240906-p5k8e4>.

[4] Ibid.

[5] Max Mason and Hannah Wootton, ‘CFMEU official used super fund money to help union, alleges APRA’, Australian Financial Review (online, 6 September 2024) <https://www.afr.com/companies/financial-services/apra-alleges-senior-cfmeu-official-used-super-fund-money-to-help-union-20240906-p5k8e4>.

[6] Amelia McGuire, ‘ESSSuper takes Iress to court claiming tax mistakes cost it members’, Australian Financial Review (online, 11 November 2024) <https://www.afr.com/technology/esssuper-takes-iress-to-court-claiming-tax-mistakes-cost-it-members-20241111-p5kpl9>.