A parliamentary committee has been told that director's fees for industry fund Cbus amounted to over $1 million in 2012-13 and the Australian Prudential Regulation Authority (APRA) was asked whether this represented industry best practice.
The chair of the House of Representatives Economics Committee, Kelly O'Dwyer pointed out to APRA senior executive that there seemed to be "a significant difference in the fees paid to directors between industry and retail funds".
"Cbus Super paid over $1 million in directors' fees in the 2012-13 financial year whilst AMP directors do not receive any remuneration in their capacity as directors of the company. Instead, they are paid by AMP Limited in accordance with their employment contract," she said.
O'Dwyer then asked APRA member, Helen Rowell whether she believed it was best practice for industry super funds to pay large directors' fees that are ultimately passed on to members.
"Does this, in itself, constitute a cause for concern?" she asked.
Rowell responded that she believed it was reasonable to expect that directors be paid for serving on a board and that the structures could be very different.
"In the industry fund, the not-for-profit sector, the money has to come directly out of the funds of the members. In the retail sector it can be paid directly out of the fund or it can be paid by the ultimate owner. Indirectly, those costs would be recouped through the fees and expenses charged at the super funds," Rowell said.
"So, on balance, I am not sure you could draw a conclusion that the members in one fund or another are being disadvantaged; it is just about the different nature of the arrangement and the flows and where the directors' costs are being met from."
