The superannuation performance test should be conducted in a two-stage approach and assessed by a panel of experienced industry professionals who are impartial, according to the chairs of major super funds.
In a submission to the government’s Your Future Your Super legislation, the chairs of Aware Super, Cbus, HESTA, QSuper, REST, and SunSuper said the performance test stages should be the benchmark test and an independent assessment.
They proposed the process would be:
The panel, they said, should be comprised of people who had an in-depth understanding of the funds management business, the objectives of super, and a clear sense of the policy objective of reporting rigorously and independently on performance will be the most effective way of implementing and supporting the objective of implementing the government’s policy objectives.
They also said an example criteria for the assessment would be:
The chairs noted the panel should advise on the determination for the asset class performance benchmarks including appropriate unlisted benchmarks, and overall fund performance targets, as part of the first hurdle criteria.
“We wish to make it quite clear that our proposal for a two-hurdle approach is not to evade clear accountability. We believe that poor performing funds that do not meet their promise to members should not be entitled to receive funds flow from a government mandated system,” they said.
“Indeed, the second hurdle will be particularly imposing for those funds that are called before the panel. No fund would want to get into that position.”
The central bank has announced its latest rate decision amid stubborn inflation and increasing geopolitical tension.
Aware Super has outlined its systematic approach to corporate engagement as institutional investors increasingly assert their influence on company boards and take on an active stewardship role.
The country’s second-largest super fund has completed its fourth SFT this past financial year and welcomes almost 5,000 new members.
The corporate fund has announced it is seeking a suitable merger partner as the number of corporate super funds in Australia continues to dwindle.
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