The Government has, reportedly, dropped plans to change the governance of large super funds by requiring at least one-third independent directors.
The Government has for some time wanted to increase the number of independent directors on super fund boards – which would particularly impact industry funds. However this has now been dropped, the Australian Financial Review reports.
According to the Phillip Coorey, the decision to drop the proposed change was made before the recent leadership spill. But it apparently won’t be reversed by the new Treasury ministers – it is as yet unclear who had responsibility for superannuation.
The Superannuation Laws Amendment (Strengthening Trustee Arrangements) Bill 2017 would have required large super funds to have at least one-third independent directors and an independent Chair, among other changes. An earlier version of the Bill, the Superannuation Legislation Amendment (Trustee Governance) Bill 2015, was introduced to Parliament in September 2015 – by the then Assistant Treasurer, and now Treasurer, Josh Frydenberg. However the Government couldn’t get enough support to pass either Bill through the Senate.
Update: The ABC has been told that the change is still Government policy, but the Bill will be ‘shelved’. It was last debated in late 2017, as is the case for several of the Government’s superannuation Bills.
The Financial System Inquiry, started by the Coalition, recommended a majority of independent directors. However the Government went with the recommendation of the earlier Super System (Cooper) Review – started by Labor – which recommended at least one-third independent directors.
The Banking Royal Commission seemingly played a part in the decision to drop the policy. The Commission had recently concluded its hearings into superannuation, from which industry funds emerged almost unscathed, unlike retail funds.
More to come.