While supporting proposed changes to the governance structures of super funds, ASFA said its support should not be taken as the belief that current structures are not effective.
Commenting on its submission which responds to the government’s draft legislation to change the composition of super fund boards, the Association of Superannuation Funds of Australia (ASFA) said it supports the inclusion of at least one-third of independents for all APRA-regulated super funds.
However, ASFA chief executive Pauline Vamos said this support should not be seen as an indication that current governance structures are not effective.
Rather the support is in recognition of changing community expectations, increased complexity and risk in running superannuation businesses and significantly higher regulatory standards, Ms Vamos said.
“ASFA supports increasing the number of independent directors on the boards of super funds and we recognise that over the past few years, many trustee boards across all sectors have already taken the opportunity to supplement their skills and have appointed independent directors.”
“The right independent directors can offer diversity of thought and the benefit of experience outside traditional superannuation services,” she said.
Ms Vamos added that the submission also calls for further consideration of the complexity of the superannuation sector.
“In order to be realistic in our transition time frames and criteria, we need to consider the many different structures and sizes across the superannuation sector," she said.
"A 'one size fits all' approach may have unintended consequences, and as such ASFA urges both the final legislation and APRA prudential standards to be principles based and rolled out across a minimum three-year transition period."