ISA calls for bank super scrutiny
Future debate around the governance of superannuation funds needs to be evidence-based and be inclusive of bank-owned funds, according to Industry Super Australia (ISA).
Issuing a response to the Financial System Inquiry (FSI), the ISA said it supported the inquiry's call for bipartisan agreement on the purpose of the superannuation system and the need for policy stability.
"Equally, future debate on the governance of superannuation funds needs to be evidence based," it said. "The representative trustee system is a feature of industry super funds, public sector funds and corporate funds. These funds return all profits to members, and have on average, outperformed bank-owned super funds over the past 17 years according to data published by the regulator, APRA."
ISA chief executive, David Whiteley said industry funds welcomed a debate how to ensure the super system aced exclusively in the interests of fund members.
"I am confident that the Government in considering the most appropriate governance of super funds will be reviewing the governance of bank-owned super funds. Specifically, they will want to investigate the trade-off between returns to members and dividends paid to bank shareholders," Whiteley said.
He said the issue of returns to members and dividends paid to bank shareholders was "the most obvious cause of tension and inefficiency in Australia's compulsory super system".
"All the evidence points to the representative trustee system being the model that puts members' best interests front and centre and has delivered stronger investment returns and ultimately bigger super nest eggs," Whiteley claimed.
Recommended for you
Financial Services Council chief executive, Blake Briggs, is urging Minister for Financial Services, Stephen Jones, to take advantage of the QAR opportunity to reduce regulatory duplication and ensure advice is affordable.
Former chair of the House of Representatives’ Standing Economics Committee, Tim Wilson, is planning a return to politics after losing his seat in the 2022 federal election.
Morningstar is going to offer research ratings of funds in the $3.5 trillion superannuation sector for the first time in response to demand from financial advisers.
Treasurer Jim Chalmers has opened a consultation into the design of the annual superannuation performance test, canvassing views on a range of reform options.
