Plans to partially ban superannuation fund advertising on platforms like his own could “reduce competition and limit choice” for workers, claims Employment Hero CEO Ben Thompson.
Employment Hero CEO Ben Thompson says the federal government’s plan to partially ban superannuation fund advertising on platforms like his own could “reduce competition and limit choice” for workers.
The government claims otherwise, saying targeted reforms will preserve employee choice — and potentially save hundreds of millions of dollars workers would otherwise lose in unnecessary fees.
Last Friday, Assistant Treasurer and Minister for Financial Services Stephen Jones unveiled draft legislation that would enact the government’s payday superannuation plan.
In addition to reforms aligning superannuation guarantee payments with the payment of employee wages, the draft legislation proposes a limited ban on superannuation advertising.
If passed into law, it would curtail the advertisement of super funds during the employee onboarding process, when many workers are most engaged with their choice of retirement fund.
In effect, human resources platforms and onboarding software systems would only be permitted to highlight a handful of super funds to workers entering a new job.
Approved options would include:
- the default superannuation fund selected by the employer,
- the superannuation fund to which a worker is already ‘stapled’, if they have one,
- and MySuper funds that pass annual performance tests.
The federal government believes a partial advertising ban will stop workers from making financial decisions against their best interests.
“Advertising during onboarding may confuse or pressure employees into making uninformed decisions, opening inappropriate products and unintentionally creating duplicate accounts with a detrimental impact on their retirement savings,” according to Treasury impact analysis published in July last year.
The policy is “estimated to provide between $20 million to $167 million per year in ongoing net benefits”, by preventing workers from paying fees on multiple super accounts or choosing super funds with underwhelming performance.
The proposed ban would affect Employment Hero, which collects revenue by allowing superannuation funds to advertise their products to workers during the onboarding process.
In a statement provided to SmartCompany on Thursday, Thompson called the overall payday superannuation package “a win for employees, helping to close the gap on missed or delayed contributions”.
He welcomed the ability for platforms like his own to continue advertising MySuper products, saying those ads play a “crucial role” in helping employees understand their options and make informed choices about their financial future.
However, other superannuation funds will “face higher acquisition costs just to attract members” under the plan.
“This could reduce competition and limit choice, which ultimately isn’t good for workers,” said Thompson.
“A well-functioning super system should create a level playing field where all funds, not just a select few, can fairly draw in and retain members.”
Thompson’s comments come 12 months after his explosive war of words with superannuation fund (and indirect Employment Hero investor) Hostplus, which argued in favour of super fund advertising reform.
His statement also coincides with the emergence of international competitors like Rippling in the Australian market, challenging a firm valued at $2 billion.
Thompson is not the only HR tech founder concerned by the plan.
Ben Styles is the co-founder of SuperAPI, an HR tech platform connecting superannuation funds with the employee onboarding process.
In a statement provided to SmartCompany, Styles said a ban on advertising non-MySuper products through the onboarding process will “eliminate competition, which is very bad for Australians”.
New entrants to the super funds market have competitive fees, “yet would potentially be banned from advertising” under the government’s proposed model, Styles added.
“This introduces a level of anti-consumer conduct that is harmful to everyday Australians trying to make an informed choice.”
Conversely, some consumer advocates say the government’s plan does not go far enough.
“The partial ban is a step in the right direction, as it will stop the worst super funds from being advertised during employee onboarding,” said Katrina Ellis, deputy CEO of Super Consumers Australia.
“But we remain concerned that there is not a complete ban on this advertising.”
“It is not in workers’ best interests to have their employment monetised, and to exploit the complexity of super by advertising through onboarding software,” Ellis continued.
If passed into law, the reforms will come into place on July 1, 2026.
The government has opened a consultation on the plan before tabling it in Parliament, with stakeholders free to share their views before April 11.
