Australia Post has caved into union pressure and dumped AMP as its default superannuation fund provider, as the fallout for the wealth giant from the banking royal commission continues.
On Tuesday it was confirmed Australia Post will go through a tender process to find a new default super fund provider after terminating the arrangement with AMP.
AMP was the default super fund for new employees at Australia Post who joined the organisation after 2013 and therefore were ineligible to join the Australia Post Superannuation Scheme.
Australia Post has been under pressure from the Communications Workers Union to review its relationship with AMP since April, when the banking royal commission uncovered systemic misconduct at AMP including misleading the corporate regulator and charging customers fees for no service.
The revelations sparked an exodus at the highest levels of the $9 billion wealth manager, forcing out chairman Catherine Brenner, chief executive Craig Meller, legal counsel Brian Salter and three other directors.
ACTU meanwhile is running a widespread “ban banks from super” campaign to pressure the government into banning banks from operating super funds.
Australia Post is expected to find an alternative default provider by the end of this year. Australia Post has over 34,000 full-time and part-time employees, according to its latest annual report.
An Australia Post spokeswoman said: “After an extensive review, and to ensure the best value for our employees, we have decided to explore the market. We will be working closely with our employees during this time, and anticipate to have arrangements finalised in the coming months.”
This is the second high profile departure from the retail super fund this month.
Last week the Anglican National Super replaced AMP with Mercer to manage its $250 million superannuation fund.
An AMP spokeswoman said in a statement: “As part of good governance, we expect our customers to periodically review their service arrangements. We support and participate in this process.”
AMP’s workplace super business has more than $32 billion in assets under management and covers more than 53,000 employers.
“If organisations decide to change default providers we do everything possible to ensure a smooth transition of members’ benefits, while continuing to provide strong returns and service to those members who decide to stay with AMP,” she said.