Having succeeded in lobbying cross-bench Senators to oppose the Government’s changes to superannuation governance arrangement, the industry funds movement has moved to set its own governance agenda via a review by former Reserve Bank Governor, Berrnie Fraser.
Industry Super Australia (ISA) and the Australian Institute of Superannuation Trustees (AIST) used the Senate move to announce that they were commissioning the review by Fraser to “develop a best practice governance code of conduct for not-for-profit super funds by 30 April 2016”.
Frasier, who has a long background in the industry funds movement, would leave a panel of experts with specialist knowledge of global pension fund governance.
They said the review would assess global best practice pension fund governance and develop a Code of Conduct which would be mandatory for ISA and AIST member funds and complement Australian Prudential Regulation Authority (APRA) prudential standards and guidance.
Such a code would place the industry funds on a similar footing to the Financial Services Council (FSC) in the context of having their own formalised position on governance standards.
However the FSC has made clear that while it has noted the Senate’s position on the Government’s proposed governance changes, it will not be relenting on pursuing the need for at least one-third independent directors inclusive of an independent chairman.
The FSC issued a formal statement saying that the proposal for independent directors on the superannuation trustee boards was “a moderate reform that would apply to all superannuation funds — retail, industry, corporate and public sector”.
In doing so, the FSC made clear that it saw the governance issue as unresolved and something it would continue to pursue.
A win for sense and fact-based reasoning. Pity the FSC don’t appear to be as nearly concerned about the still unresolved horror stories and shattered lives left in the wake of some of their largest constituents’ advice and related debacles! As the good Senators reminded Australians, none of them have had such tales of trauma regularly brought to them by clients of industry funds that have operated by and large under their existing governance arrangements for over 25 years.