Two fronts in the battle between industry and retail super funds have been revived by the introduction of Government Bills to the Parliament to change the governance and reporting requirements on super funds.
The Government has introduced two Bills to the Parliament to enact its super fund governance changes – including at least one-third independent directors – and ‘transparency and accountability’ policies.
Industry Super Australia (ISA) said the Government Bills risk dismantling the not-for-profit super fund sector, while giving retail funds a “leave pass” on transparency and disclosure.
“Australians will be concerned that the Government’s agenda is not about improving governance and transparency but advancing the commercial interests of the banks,” said ISA.
“The government has still not advanced any evidence that their proposals will improve returns for members.”
The Financial Services Council (FSC) – which represents large financial institutions, including the major banks – welcomed the Bills, with CEO Sally Loane saying they will “modernise the superannuation system and make it responsive and accountable to consumers”.
“Our superannuation industry is currently too opaque and predicated on disengagement. These reforms will ensure superannuation is more transparent and better suited to a new generation of informed consumers. This will result in better retirement outcomes,” Loane said.
The fight over super fund governance has been going on for years. The Coalition took a policy of more independent directors for super funds to the 2013 election, though it was not until 2015 that a Bill was introduced. Industry and retail funds also disagree over what and how information should be reported and are continuing to position themselves while the Productivity Commission conducts its inquiry into competitiveness and efficiency in the super system, which includes new ways to select default super funds. The Commission is expected to give its draft report in early 2018, followed by the final report in June 2018.