Employment Hero CEO Ben Thompson has escalated his public feud with superannuation fund Hostplus, claiming it called his behaviour “erratic and unlawful” in a letter sent to venture capital backer Airtree.
Now, Airtree says it is endeavouring to “find a common understanding” between the Australian tech unicorn and the superannuation giant.
During the last fortnight, Thompson has challenged Hostplus over the superannuation fund’s submission to a recent Treasury consultation, in which Hostplus criticised the way platforms like Employment Hero display superannuation fund options during the employee onboarding process.
Hostplus’ preferred policies would “put Employment Hero out of business”, Thompson sensationally claimed in late February, kickstarting an extraordinary string of social media posts disputing the super fund’s claims.
That dispute culminated on Tuesday with his publication on LinkedIn of a letter purportedly sent by Hostplus to Employment Hero investor Airtree, which itself is backed by Hostplus.
The letter appears to call Thompson’s statements a mixture of “ranting” and a “deliberate campaign of misinformation”, and that Hostplus will consider its investment in Employment Hero in light of his recent comments.
“We also suggest that the Board of Employment Hero should now consider whether Mr Thompson’s position as CEO remains tenable in light of his conduct,” the letter continued.
Thompson defended his position on Tuesday, posting on LinkedIn that he is primarily concerned about competition in the superannuation market.
“The real issue here is that this is what can happen when Australia’s collective retirement savings and the power they convey are centralised with too few institutions,” he said.
“We care about this issue because we’re passionate about our mission — making employment easier and more valuable, for everyone,” Thompson continued.
In a statement provided to SmartCompany, Hostplus said it has never tried to limit consumer choice of superannuation funds.
“We have been a leading advocate for a competitive and transparent market of superannuation funds, where consumers can compare and switch easily to a fund that best meets their evolving needs,” a spokesperson said.
Hostplus said the proposal to ban workplace management platforms from advertising super funds on-platform will result in an “entirely objective and open process of superannuation fund selection by the employee”.
The fund will “continue to engage with the board of Employment Hero”, the spokesperson added.
As the dispute makes headlines, Airtree is publicly taking the middle ground between the superannuation giant and its portfolio company.
“It’s our job as VCs to be both trusted custodians of capital and support founders in building exceptional businesses,” a spokesperson told SmartCompany on Wednesday.
“While we’re not on Employment Hero’s board, we are working with both parties to find a common understanding of the issues they’ve put forward.”
SmartCompany has contacted Employment Hero for further comment.
The extraordinary dispute is focused on superannuation ‘stapling’: if an employee does not actively select a superannuation fund when starting a new role, employers must check if the employee has an existing ‘stapled’ super fund before establishing a new superannuation account for the employee.
This ‘stapling’ process is designed to minimise the duplication of superannuation accounts, which can unnecessarily split an employee’s retirement savings over multiple funds.
As noted by the Treasury, the ‘stapling’ process “creates an administrative burden for employers during onboarding”, as businesses must do the legwork to establish an employee’s prior super fund details.
“This incentive to encourage active choice has led to an increase in onboarding software that presents employees with funds that have paid to be advertised,” says the Treasury consultation paper.
Employment Hero allows superannuation funds to advertise on its platform, exposing new super fund options to onboarding employees — which, if selected, remove the need for employers to check for ‘stapled’ funds.
In its November 2023 submission to the Treasury consultation, Hostplus sharply criticised that kind of advertising arrangement.
It said any further reforms “must not be framed with the primary intent of reducing an employer’s ‘administrative burden’”.
“We support a ban on [workplace management platform] operators advertising and/or promoting superannuation products within the [workplace management platform], and especially as an element of a new employee’s initial onboarding,” Hostplus continued.
Updates to the federal government’s superannuation platform, formed by the recent public consultation, will be revealed in the 2024-2025 federal budget.
Senior Business Journalist
Focused on the small business sector, David’s work covers the political, regulatory, and economic issues facing Australian entrepreneurs. Prior to joining SmartCompany, he was a reporter for Business Insider Australia. You can follow him on LinkedIn.
