ACTU calls on industry super funds to reconsider relationship with banks

The Banking Royal Commission has commenced hearings into superannuation.

The Australian Council of Trade Unions has called on industry super funds – which include union representatives – to reconsider their relationships with the banks in light of the behaviour uncovered by the banking Royal Commission.

ACTU Secretary Sally McManus has written to the CEOs of industry super funds asking them to “reconsider their relationships with dodgy banks”. It is unclear from the statement if this extends to investments in the banks, or is limited to other interactions.

According to the ACTU, Ms McManus says in the letter that she has been appalled by the “outrageous and illegal behaviour” of the banks.

The letter asks industry super funds to “review and consider these relationships [with lawbreaking banks] in accordance with your existing ESG policies”.

As at December 2017, industry super funds held $589.8 billion of superannuation, according to APRA statistics.

“Working people in Australia gave up pay rises in order to get universal superannuation off the ground to provide access to a dignified retirement for everyone,” said Ms McManus.

“In light of the revelations of the past weeks at the Banking Royal Commission, I am asking Industry Super Fund CEOs to reconsider their commercial relationships with banks.”

“The retirement savings of working people should not be used to prop organisations that house rotten, corrupt and unethical behaviours like those revealed over the past weeks at the Banking Royal Commission.”

The banking Royal Commission is set to investigate use of members’ retirement savings by superannuation funds, for any purpose, that does not meet community standards or expectations or is not in the best interest of member, per the Terms of Reference.

The ACTU had previously welcomed the resignation of AMP CEO Craig Meller following revelations at the Commission. The ACTU said he should not be the last executive to go or be held to account.

“Craig Meller oversaw an operation which deliberately mismanaged the money of its clients, made false reports to the regulator and charged people who were not receiving any service from the firm,” said ACTU Assistant Secretary Scott Connolly.

“By anyone’s measure he deserves to lose his job, and is getting off lightly if that’s the only penalty he faces. And he isn’t the only senior executive in the finance industry presiding over misconduct.”

“The Turnbull Government fought to protect Craig Meller and his friends from scrutiny, and only called this Royal Commission when ordered to by the banks.”

Related: Rolling over to SMSF would have cost client $500,000

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