No case for independent directors on industry funds
There is no proof that mandating independent directors on not-for-profit superannuation funds would enhance fund performance, a report reveals.
Centre-left think tank the McKell Institute published a report based on 25 years of data, which showed the representative trustee governance structure is more likely to boost retirement incomes.
Titled ‘The Success of Representative Governance on Superannuation Boards', the report showed super funds governed by a board that had representatives from employer and employee bodies have outdone for-profit appointed trustee competitors on super performance criteria.
"After trawling extensively through 25 years' worth of rich statistical evidence, empirical data, and existing research the report ends up asking one very worthy question: when a system is working better than the alternative, why tamper with it?" the Institute's executive director Sam Crosby asked.
"If the goal is maximising retirement savings for Australians then the model most closely aligned to satisfying it is the one used by industry super funds."
He added the Abbott Government should wait before it mandates reform in the area without giving proof that change will be beneficial.
Industry Super Australia chair Peter Collins said: "The fact is we should not be surprised that the representative governance model has worked well for Australian retirees.
"Industry super funds have provided an excellent example of how employer and employee representatives can work cooperatively to deliver for Australians.
Recommended for you
With just 30 per cent of Australians knowing their superannuation balance to the nearest $1,000, Findex has emphasised the role of financial advice in addressing the critical super knowledge gap.
Underestimating the cost of insurance by almost $75,000 in a Statement of Advice is among multiple reasons that a relevant provider has faced action from the FSCP.
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.
