The Minister for Revenue and Financial Services, Kelly O’Dwyer has suggested the industry funds review of their own governance arrangements has fallen into a black hole and that the Government will be pursuing change regardless.
Addressing an industry funds conference in Canberra, O’Dwyer noted that the Government’s legislation to impose one-third independent directors on superannuation funds had been deferred by the Senate pending the outcome of the Bernie Fraser.
“This review, led by Bernie Fraser, was due to report in April this year,” she said. “It seems that this review has disappeared into a black hole.”
“My question for you all today is, are you serious about lifting governance standards in this sector or do you want to cling to out-dated practices which do not reflect the size, the scale, nor the enormous importance of this industry?”
“It may be timely to me remind you of just one example that came to light during the Trade Union Royal Commission where the Assistant State Secretary of the Transport Workers Union was paid by TWU Super, for just two and a half days work as a “Superannuation Liaison Officer”. For this, he received $93,000.
“What is particularly concerning about this example is that under questioning during the Royal Commission it was acknowledged by this individual that the arrangement wasn’t in the best interests of those people who had contributed to that superannuation fund,” O’Dwyer said.
“It is no longer credible for people to protect such cosy deals and lower governance standards, given what is at stake is confidence in the system and the retirement savings of millions of Australians,” she said.
“That is why the Government remains committed to reforms that will lift superannuation funds to at least the same standard as other financial services organisations like banks and life insurance companies. We will reintroduce our Bill to require trustee boards to have a minimum of one-third independent directors, including an independent chair.”
“So as we turn our minds to this important piece of legislation, I look forward to working collaboratively with you all. In particular, I look forward to hearing what became of the Fraser Review on not-for-profit superannuation fund governance.”
