Former RBA boss slams super plans
A former Reserve Bank governor says the Federal Government’s superannuation reforms are misguided.
The Government has been agitating for a broad restructure of the boards of all non-profit super funds, forcing them to appoint independent chairs and fill a third of their board seats with independent directors.
Former RBA governor Bernie Fraser released his long-awaited review of the non-profit super industry this week, saying the funds have an “enviable reputation” for delivering strong financial returns.
Mr Fraser says it is “far from self-evident” that enforcing minimum numbers of “independent” directors would not necessarily lead to quality or “best practice” board governance.
“That case has to be made, not inferred or asserted,” he said
But minister for revenue and financial services Kelly O’Dwyer was quick to dismiss Fraser’s report, saying it was just “a lobbying document to kill off legislation that applies equally across the entire sector”.
“After almost 15 months of waiting for the arrival of the industry-fund sponsored report into government legislation on the governance of superannuation funds, its key recommendation is that the status quo must be protected at any cost,” Ms O’Dwyer said.
“The Turnbull government remains committed to legislation to improve the accountability of boards and member outcomes regardless of whether they are retail, industry or corporate funds. I look forward to working constructively with the opposition, the crossbench senators and my colleagues to ensure the Turnbull government can deliver on its commitment to put members’ interests ahead of the self-interest in the superannuation sector.”
The Government appears committed to reintroducing the Superannuation Legislation Amendment (Governance) Bill 2015, which has sat idle in the Senate since November 2015.
The bill seeks to lift governance standards of all super funds – including industry and other not-for-profit funds – by forcing them to restructure boards of directors so that they have a minimum of one-third “independent” directors, including an independent chair.
The Fraser review was commissioned by Industry Super Australia and the Australian Institute of Superannuation Trustees to fight the proposed changes.
With the Turnbull government and the non-profit super fund industry (including union funds) having staked out their positions, and ongoing dispute is brewing.
Mr Fraser said fund members’ interests were being served by the “values, skills and experience” of their boards, while Ms O’Dwyer still backs “the need for legislation to lift the standard of accountability, transparency and choice across the entire superannuation sector”.