A weakness of the Australian superannuation fund equal representation model is that retirees are not explicitly represented, according to former Cooper Review chair and Challenger executive, Jeremy Cooper.
In documentation filed with the Senate Economics Legislation Committee this week, Cooper was strongly critical of the failure of superannuation funds to take account of retirees in terms of representation, products and services.
“Members are equated with accumulating workers,” he said. “This is a serious omission, given that the core purpose of super is providing income in retirement.”
“Now that around 700 Australians are retiring every day, this can no longer be ignored,” Cooper said, citing the experience in the Netherlands where pensions got a say.
“Imagine if all Australian Prudential Regulation Authority (APRA)-regulated funds were required to have two trustee directors over the age of 80,” Cooper’s submission said. “The idea is confronting, both because it is so different from the current way of doing things, but also because it highlights the very stakeholders who are not currently getting a look in.”
Elsewhere in his submission, Cooper claimed there was a general lack of independence of thought and leadership across the super industry with respect to the retirement phase.
“With some exceptions, funds have simply not embraced the spirit of member need and innovation in retirement income sufficiently,” he wrote. “Survey after survey of retirees and pre-retirees call for stable, regular lifetime income that gives them peace of mind in retirement; government inquiries and reform programs target the same outcomes, but the industry appears disengaged.”
He said this represented another reason why there was a need to inject new perspectives across the industry in the form of more independent trustee directors.
