HomePolicy and ResearchCooper ReviewPhase 1

Following extensive consultation with the ASFA membership, ASFA lodged its submission to Phase 1 of the Cooper Review on Governance on Friday 16 October.

The submission included a covering letter and appendices all of which are available from the ASFA Member area.

The ASFA media release regarding Phase 1 is also available to the general public.

Below you can read ASFA’s 10 key recommendations, but there were many more. ASFA has made recommendations that we believe will deliver sound public policy.

A summary of ASFA’s Top 10 Cooper Phase 1 recommendations:

1. Minimum competency standards: Notwithstanding the skills that each trustee brings to the board, a minimum competency standard and ongoing CPD requirements should be introduced for trustees (including SMSF trustees, but at a different level).
   
   
2. Policy on trustee composition, selection, removal, tenure and succession planning: Trustees should implement a governance policy that considers board composition (including age and gender balance issues), maximum tenure, appropriate selection, removal and succession planning.
   
   
3. Independent directors: Independent trustees need not be a requirement with any impediments to appointing independent trustees to be removed.
   
   
4. Clear conflict of interest rules: Trustees should have a clear and transparent policy in place to manage actual and perceived conflicts.
   
   
5. No regulatory direction or prescription on investments: ASFA does not support restrictions being imposed to enforce more diversification nor any directed investments.
   
   
6. Consolidation of the industry: Trustees should be assessing the suitability, efficiency and sustainability of their fund on an ongoing basis.
   
   
7. Rationalisation of legacy products: Legislative change is required in order to remove some of the impediments to product rationalisation.
   
   
8. CGT relief extension: To facilitate the cost effective merger of funds, and to protect the interests of fund members, CGT and loss relief on all fund mergers should be made permanent.
   
   
9. Trust model for super: The trust structure is still appropriate for the super industry but there is some room to enhance what exist today through targeted amendments of the SIS legislation. This is a complex area of law and further investigation is required.
   
   
10. Regulatory governance: ASFA believes the current arrangements of multiple regulators is being tested, particualrly in relation to criminal activities such as “illegal early release”. If there was to be a single regulator it should regulate the entire financial services industry, not just superannuation. However, whether it is constitutionally possible to incorporate multiple pieces of legislation into one Act for superannuation is questionable.