Not-for-profit super funds will be required to better disclose the remuneration of their directors and trustees as part of the MySuper regulations registered in Parliament last week.
The Australian Institute of Superannuation Trustees (AIST) said it was pleased to see its recommendations regarding executive pay adopted in the MySuper regulations, which the industry body said would create a fairer disclosure regime.
The rules would require super funds to disclose the remuneration paid or provided to directors by a related entity. Where directors are not paid for their services by the fund directly, but by a related party such as a parent body, this reform would create an "equal playing field in relation to what the public can access about different funds' remuneration practices".
"Trustee directors generally receive payment either from the fund or by another party that employs them, where part of their role is accepted as being a trustee director on the related super fund," said Eva Scheerlinck, executive manager of governance at AIST.
"No matter where the remuneration is paid from, it should be disclosed and we are pleased to see that this forms part of the new regulatory framework.
"In many cases, the remuneration paid from the fund is only tiny compared to the remuneration some directors receive as an employee of the trust's parent company," she said.
If the directors are paid by the fund, they will need to disclose where the money is paid to (if it is not paid directly to the director, but rather to a sponsoring body or their employer).
"While some not-for-profit funds have lead the way and have adopted best practice by disclosing remuneration and ensuring transparency around the operations of their boards and executive, there has been room for improvement elsewhere," Scheerlinck said.
