The Association of Superannuation Funds of Australia (ASFA) says the government's release of draft legislation, which will require boards of superannuation funds to be comprised of at least one-third independent directors and for the chair of the board to be independent, reflects changing community expectations as a result of the increasing size and complexity of funds, and is a positive outcome for superannuation.
ASFA has supported increasing the number of independent directors on the boards of superannuation funds and many trustee boards have already moved down this path. The industry has anticipated this change and been working on a pipeline of independent directors through ASFA's Trustee Director Accreditation Program.
"Running superannuation funds today is very different to 20 years ago given their increased size and complexity around investments, retirement products, financial advice, digital disruption and member expectations," said ASFA CEO, Ms Pauline Vamos.
"Trustee board structures should provide the ability to manage the rapidly changing superannuation environment, including an increasing proportion of post-retirement members. As a minimum, there must be the flexibility to appoint directors who have the right skills, experience and knowledge, as well as cultural fit.
"Many trustee boards have already taken the opportunity to supplement their skills and have appointed independent directors over the past few years."
ASFA also supports the government's proposal to require trustee boards to appoint an independent chair.
"This proposal is consistent with contemporary governance standards and with requirements of other prudentially regulated entities.
"ASFA will carefully consider the draft legislation and explanatory material, with a particular focus on ensuring that the proposed definitions and transition arrangements are workable, and will make a submission to the Treasury in due course," concluded Ms Vamos.
For further information, please contact:
Katrina Horrobin, 0451 949 300.
ASFA is the peak policy, research and advocacy body for Australia's superannuation industry. It is a not-for-profit, sector-neutral, and non-party political national organisation, which aims to advance effective retirement outcomes for members of funds through research, advocacy and the development of policy and industry best practice.