Legislation demanding not-for-profit superannuation funds adopt one-third independent directors onto their boards could put the savings of millions of Australians at risk.
Addressing the Senate Economics Legislation Committee Inquiry into the Superannuation Legislation Amendment (Trustee Governance) Bill 2015, Industry Super Australia chief executive, David Whiteley, said “there is no room for ideology in superannuation policy”.
Whilteley told the committee that the proposed changes amounted to an “over-reach” by the Government.
“These changes risk transforming the structure, character and ultimately the performance of the not-for-profit sector, whether deliberately or otherwise,” he said.
“What the Bill would achieve, if passed, is to dismantle the structure and character of the industry funds which stand between consumers’ retirement savings and the four major banks.
“The quality of retirement for millions of Australians is dependent, in part at least, on the performance of their super fund. This bill is a risk to the savings of millions of Australian workers.”
Whiteley said the Bill “is at odds with the Government’s stated objectives”.
“One of the Government’s objectives is to better align fund governance with the Australian Securities Exchange (ASX) approach,” he said.
“However, the prescriptive approach of the Bill and unprecedented powers proposed for APRA (Australian Prudential Regulation Authority) are inconsistent with the principles-based approach of the ASX.”
The ISA chief executive also noted that the Productivity Commission’s 2012 review considered evidence to “compelling evidence” to support the introduction of quotas of independent directors on super fund boards, instead supporting the governance reforms contained in the Stronger Super Reforms.
“The Productivity Commission has a fierce reputation for its rigor and ignoring its important contribution would not be a sound way to proceed,” Whiteley said.
