ISA defends board structure
Industry super funds' board structure has helped them achieve "superior returns" for their members, according to Industry Super Australia (ISA) chief executive officer David Whiteley.
Whiteley's comment came after the release of the Government's discussion paper on governance, transparency and competition in superannuation, which proposed all superannuation funds appoint majority independent directors to their boards.
This particular proposal is seen as specifically targetting industry super funds.
"By being free from relationships that could materially interfere with their judgment they [superannuation funds] can provide an objective assessment of issues," the discussion paper, released by the Assistant Treasurer, Senator Arthur Sinodinos, read.
However, Whiteley said funds with the representative trustee structure were run only to benefit members and have outperformed retail super funds — typically run by banks — over the past 12 years by an average of 2.3 per cent per year.
"The representative trustee system is a feature of retirement systems globally and in Australia has delivered fund members superior net returns over the long term, when compared to retail super funds typically run by banks," he said.
"Representative trustee board composition is not homogenous, with many funds having independent directors and/or chairs."
According to ISA, member returns should be central to proposed changes to the regulation of the superannuation sector.
The industry super fund body is also unhappy with the proposed changes to the way workplace default funds are selected.
ISA had expressed concern that few employers will have the time or expertise to select a default fund for their employees from the expected 100 MySuper options.
"Default superannuation funds have a critical role in ensuring the super system delivers to members who are not engaged with their super. It is absolutely critical that only the best performing funds make the cut. Industry SuperFunds are concerned that these proposals will remove an important merit based process which is transparent, independent and places a premium on member returns," Whiteley said
AUTHOR
Staff Writer
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.
