The Coalition chair of the bank oversight committee has torpedoed the government's campaign to make not-for-profit industry super funds more like the banks by delivering a withering assessment of the majority independent Commonwealth Bank board during hearings in Canberra.
At the House Economics Committee bank oversight hearing, chair and Liberal MP David Coleman said:
“…the allegation is that, through extraordinarily inappropriate practices and procedures and just plain incompetence, you created an environment in which multiple criminal syndicates could make use of your ATMs to flourish in their allegedly criminal endeavours”
“... the board, of which you are a member, signed off on a remuneration report... It is very hard to see how, at bare minimum, that is not extraordinarily incompetent, if not even more problematic for the individual directors.”
"You can understand why a sensible or reasonable member of the public might not have full confidence in the board” (Hansard House Representatives Economics Committee 20 October 2017)
Yet despite this scathing assessment Superannuation Minister Kelly O’Dwyer has pledged to:
“lift superannuation funds to at least the same standard as other financial services organisations like banks and life insurance companies” (AFR, “Super industry laughs at O’Dwyer”, 23 Nov 2016)
The comments come as the government attempts to push legislation through Parliament to make not-for-profit industry super fund boards like the banks with mandatory quotas of independent directors.
Industry Super Australia public affairs director, Matt Linden, said forcing high-performing, scandal free not-for-profit super fund boards to become like the CBA’s ‘extraordinarily incompetent’ board beggars belief.
“The industry super funds’ equal representation governance model - which guarantees employer and employee oversight of super savings - is used by the world’s top-ranking pension systems,” said Linden.
“Industry funds have, on average, outperformed bank-owned retail funds by two per cent^ for over a decade while avoiding the scandals that have plagued the for-profit financial services sector”.
“Forcing our boards to emulate those of the big banks – which, in the past two years have had to pay their customers around $480 million in compensation – is not in members’ interests,” he said.
Industry Super is calling on the parliament to oppose the governance changes. The legislation is part of a package of three Bills expected to be voted on in the next few weeks.
^ISA analysis of SuperRatings Fund Crediting Rate Survey, SR50 - Balanced Option Medians, June 2017
Matt Linden is available for interview. Media contact: Phil Davey 0414 867 188
Industry Super Australia provides policy, research and advocacy on behalf of 15 not-for-profit Industry SuperFunds who are the custodians of the retirement savings of five million Australians.