Govt reignites debate on industry super

Business has welcomed a move by the Abbott government to examine changes to industry superannuation funds.

Industrial laws allow the inclusion of default super funds in workplace agreements.

Assistant Treasurer Josh Frydenberg, who has replaced Arthur Sinodinos as the minister responsible for retirement savings, says such laws leave retail funds and small industry funds at a competitive disadvantage.

The minister has also flagged possible changes to ensure super funds have an independent chair and a large number of independent directors.

This would improve governance and get the best outcomes for super fund members, he says.

The Australian Chamber of Commerce and Industry's industry policy director John Osborn said policy change was needed.

"Currently, an employee who is subject to an enterprise agreement cannot redirect contributions to a personally nominated fund - this is something worth reconsidering," he said.

"It doesn't make much sense to lock individual employees into funds they don't want or don't best suit their needs."

There are also broader competition implications of limiting the ability of people to actively manage their retirement income investments, Mr Osborn said.

ACCI was more cautious about removing retirement products entirely from workplace agreements, instead arguing people should be able to opt out of default funds.

Shadow assistant treasurer Dr Andrew Leigh said the government should focus on the returns from funds, not "political games".

"The industry super funds were returning an average of seven per cent a year, retail super funds were returning an average of six per cent a year," he said.

"So why the government thinks that it ought to be a top priority to shift the playing field towards retail funds is beyond me.

"An extra one per cent a year translates into potentially tens of thousands of dollars more in retirement savings for workers - that's the goal the government ought to be focused on."