Frydenberg outlines key changes to super governance bill
The Federal Government has announced key adjustments to its superannuation fund governance changes but they fall short of entirely mollifying angry industry funds.
The Assistant Treasurer, Josh Frydenberg today outlined changes to the original exposure draft legislation which will see the independent chairman being drawn from the existing one-third independent directors and confirmation of equal representation arrangements.
The changes also more comprehensively spell out transition arrangements to assist funds in making the necessary changes.
The changes outlined by Frydenberg today include:
- more detail on the definition of ‘independent' in the law, rather than in APRA's prudential standards, to provide greater certainty around the legal obligations of trustee boards;
- ensuring the new requirements and transition period both commence from Royal Assent so existing funds have a full three-year transition period;
- providing greater flexibility during the transition period by clarifying that neither the current equal representation rules nor the new independence requirements will apply where an APRA compliant transition plan is in place;
- clarifying that the independent chair can be included in the one-third independent directors;
- extending the period for filling a trustee vacancy from 90 days to 120 days; and
- clarifying that the Bill overrides both governing rules and the constitution of a corporate trustee.
The Government will also include in the explanatory materials:
- guidance on how to fulfil the requirement to report on an ‘if not, why not' basis, consistent with ASX best practice principles, where a majority of directors are not independent; and
- clarification that boards can appoint an independent chair at any time between the date of Royal Assent and the end of the transition period.
The Assistant Treasurer said he believed the amendments would provide greater clarity and certainty.
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