Will super funds face a dearth of directors?

10 October 2017
| By Mike |
image
image image
expand image

The narrowing of the definition of “independent” in the context of directors on superannuation fund boards will serve to narrow the pool of available independent directors, according to industry superannuation fund REST.

In its submission to the Senate Economics Legislation Committee inquiry into the legislation underpinning changes to super fund governance arrangements, REST has sought clarification of the meaning of “independent” especially in the context of employer sponsored directors.

In doing so, the fund said superannuation was a specialised financial product with its own prescriptive legislation and rules and accordingly, directors had to have a higher threshold of knowledge requirements to satisfy the fitness and propriety test.

“As a result, the pool of superannuation trustee directors compared to the pool of non-superannuation fund directors is more limited,” the submission said.

“By having overly prescriptive requirements, this pool is narrowed further, making it difficult for superannuation funds to find appropriate independent directors that meet all of the independence requirements.”

The submission said this would be further complicated by all super funds going through the same process at the same time, competing with each other as well as other non-superannuation funds to achieve their required quotas.

“Flexibility from the regulator relating to timing of the appointment of independent directors to super funds may be necessary as this will be an industry-wide problem” it said. “It should be a period longer than the standard 90 days.”

Read more about:

AUTHOR

Submitted by Gudpert on Wed, 10/11/2017 - 08:26

This is amusing, first independent directors aren't needed, now there won't be enough of them anyway. I would argue independent directors would have more financial industry experience than any union representative on a Trustee board.

Recommended for you

sub-bgsidebar subscription

Never miss the latest developments in Super Review! Anytime, Anywhere!

Grant Banner

From my perspective, 40- 50% of people are likely going to be deeply unhappy about how long they actually live. ...

1 year 6 months ago
Kevin Gorman

Super director remuneration ...

1 year 6 months ago
Anthony Asher

No doubt true, but most of it is still because over 45’s have been upgrading their houses with 30 year mortgages. Money ...

1 year 6 months ago

Economists from the big four banks have all predicted the RBA to deliver another rate cut during its July meeting; however, some admit the decision will be a close call....

5 hours 28 minutes ago

AMP’s strong 2024–25 returns were anything but a fluke – they were the product of a carefully recalibrated investment strategy that began several years ago, when the fund...

5 hours 36 minutes ago

ASIC is “considering what options” it has to hold super trustees to account for including the failed schemes on their platforms, according to its deputy chair....

5 hours 36 minutes ago

TOP PERFORMING FUNDS

ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
2
DomaCom DFS Mortgage
95.46 3 y p.a(%)
5