Superannuation fund directors will have to live up to the same standards of governance and conduct as those of bank and insurance company directors under changes to the underlying superannuation laws put forward by the Federal Government.
The Minister for Revenue and Financial Services, Kelly O’Dwyer outlined the changes within an exposure draft bill and explanatory memorandum released yesterday and said the legislation would “make directors of superannuation funds who breach their duties to members subject to the same civil and criminal penalties as directors of ordinary managed investment schemes”.
According to the explanatory memorandum attached to the legislation, the amendments will “allow civil and criminal penalties to be imposed on directors of corporate trustees of superannuation funds who fail to execute their responsibilities to act in the interests of members, or who use their position to further their own interests to the detriment of members”.
The Government has also moved to make life more exacting for superannuation fund trustees and executives by including in the legislation measures to require funds to hold annual meetings of members, similar in nature to the annual general meetings held by publicly-listed companies.
O’Dwyer said this was already a longstanding requirement for the public companies in which superannuation funds invested member funds.
Apparently foreseeing some pushback from elements of the superannuation industry, O’Dwyer said many of the measures contained in the legislative package had been recommended by past review into superannuation commissioned by both Coalition and Labor Governments.
“These are sensible reforms that are already being embedded in the practices of high performing funds,” she said.
A key element of the legislation is a toughening of requirements around the provision of MySuper products, and the ability of the Australian Prudential Regulation Authority (APRA) to refuse or remove an authorisation for a MySuper product where they are deemed to fail to live up to member expectations.