Rival union the Retail and Fast Food Workers Union is challenging the agreement on grounds the clause leaves workers worse off than the award and that workers should choose their own industry fund.
“Kmart’s the only employer who’s refusing a form of choice … that’s unacceptable,” RAFFWU secretary Josh Cullinan said.
“If someone is working in their main job as a teacher, is participating in a state super plan and is then required on their casual shifts to join REST, pay admin fees and have insurance products, over time that will diminish their retirement incomes. We think that’s an archaic system.”
The trade union royal commission slammed forced super fund clauses, estimated to cover some 2 million workers, in 2016 and recommended they be made illegal.
However, the Coalition’s legislation to ban them is stuck in Parliament due to Labor opposition.
Kmart’s 2019 EA, awaiting approval before the Fair Work Commission, sets REST as employees’ fund and says “the ability to opt in and out of the fund as provided within the Superannuation Guarantee Administration Act 1992 and the applicable regulations shall not apply”.
“Team members employed under the terms of this agreement are not eligible to elect another superannuation fund into which the team members’ employer contributions are paid,” the agreement says.
Union defends REST
An SDA spokesman defended the clause by arguing REST was the highest performing industry fund of its class over the past 10 years.
“These arrangements are consistent with existing laws, reflect the superior performance of industry funds and were fully endorsed with a 91.7 per cent yes vote by Kmart employees on their new EBA in December 2018,” he said.
REST’s MySuper default Rest Core made it into Chant West’s top 10 funds over 10 years, returning 8.4 per cent, but performance has been lower compared to other big industry funds in the shorter term.
On Chant West rankings, REST Core was 44th out of 64 funds over five years, fifth out of 57 over 10 years and 11th out of 52 over 15 years.
“While its performance has been disappointing compared to most other large industry funds in recent years, it has delivered strong performance over the long term,” Chant West senior research manager Mano Mohankumar said.
The SDA also benefits from REST, with employee representatives on the board forwarding more than $300,000 in director fees to the union over the past three years.
Former SDA national secretary and “honorary” president Joe de Bruyn was paid $153,452 last year from his role as a REST board director.
Traditionally union employee directors return their fees to the union but the SDA said in its most recent financial report that Mr de Bruyn “no longer receives a salary from the organisation and so is entitled to receive director fees for services as REST director”.
A Kmart spokesman said new proposed agreement was “consistent with the current agreement and complies with Australian Superannuation Legislation”.
“We’re aware of an objection that has been raised and this will be dealt with by the FWC as per the usual approval process.”
A hearing on the Kmart agreement is scheduled for April 5.
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