Govt side-steps cost of life commissions ban
The Federal Government has sent a clear signal it will not be legislating to remove perceived conflicts of interest on superannuation fund boards, and has side-stepped the issue of whether banning commissions on life/risk inside superannuation will increase the cost of insurance.
The conflict of interest issue has been raised by the Federal Opposition with respect to some people holding multiple positions on industry superannuation fund trustee boards, but a Treasury answer to a question on notice has ruled out any legislative remedies.
The Treasury answer said that while the Government supported best practice in governance, it believed the matter should be “addressed, to the extent possible, by a voluntary industry code of governance and, where appropriate, by prudential standards”.
It said the Government would consult with relevant stakeholders on design and implementation issues and this would provide an opportunity for best practice issues, including remuneration, to be raised if appropriate.
On the question of whether banning commissions on life/risk products inside super would increase costs, the Treasury answer said “we are not in a position to comment on the possible commercial outcomes of implementing legislative reforms”.
AUTHOR
Mike Taylor
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