Minister for Financial Services and Superannuation, Bill Shorten, will hold further discussions with stakeholders from within Australia’s superannuation industry in a bid to improve transparency and governance across the sector.
Last week, Shorten released draft legislation that requires superannuation funds to publish details of director and executive pay and details of what assets the fund has invested in on their websites.
They are also required to provide an up-to-date ‘product dashboard’, setting out information on target investment returns, past performance against targets, investment risk, liquidity and fees, in relation to each product offered by the fund.
In his speech following the release of the third tranche of MySuper, Shorten said he will be holding further discussions with industry stakeholders about improving transparency and governance across the industry.
“In the wake of collapses such as [Trio Capital], it is important for Australians to know where their super savings are being invested,” he said.
‘I will be holding more discussions with key stakeholders on how to further improve transparency and governance in the superannuation industry.”
In the wake of the release of the draft legislation, Australia’s superannuation fund sector has been urged to consider adopting the government’s proposals for improved disclosure and governance in their individual operations.
The Australian Institute of Superannuation Trustees (AIST) and BT Financial Group (BTFG) have expressed support for elements of the government’s further MySuper legislation released on Friday.
BTFG head of superannuation and platforms Melanie Evans said the proposals around improving disclosure of remuneration, directors’ experience and investment holdings were a positive, however, it does not go far enough.
“Australians have $1.3 trillion in superannuation today and this is projected to grow to $5.5 trillion by 2030. Given the size of super and its significance to all Australians, the people managing it should adhere to the highest governance standards,” Evans said.
She said “at the heart” of good governance in super is the composition of the funds’ board of directors.
“Just like listed companies, the majority of directors must be independent to ensure the best outcomes for the members of the fund,” she said.
“Models other than those based on independence unnecessarily shrink the talent pool to a finite number of people so that you may not get the best outcome for members.”
AIST chief executive Fiona Reynolds said the release of legislation puts “the rules in place in relation to fund governance and remuneration”.
“These rules are in line with AIST’s fund governance guidelines so funds are expecting these new requirements,” she said.
“The important thing is that the government has stuck to its previous policy of ensuring that MySuper is a transparent product that is readily comparable.”
Trio Capital collapsed in late 2009, resulting in the loss of more than $100 million in investor funds.
