Industry Super Australia has urged the government to prioritise unpaid super, the super gender gap and multiple accounts rather than cave into bank-lobbying to dismantle the industry super governance model.
Reports today suggest this government is preparing a raft of Bills that could dismantle the governance model of industry super funds whilst giving bank-owned super funds a ‘leave pass’ on some of the new disclosure and transparency requirements.
The Bills come despite ongoing revelations about poor governance, culture and conduct within the banks and their wealth management arms.
Industry Super chief executive David Whiteley said: “Industry super funds are deliberately different and have been immune to the scandals that continue to cause significant consumer loss and hardship”.
"Member-first governance and culture is the reason industry super funds outperform bank-owned super funds”.
For the ten years to 30 June 2017, SuperRatings monthly data shows, on average, industry super funds have outperformed bank-owned super funds by more than 2 per cent over 10 years*.
"The success of the trustee governance model is evident in the outperformance of the industry super sector over the bank-owned super sector,” said Whiteley.
"The government should focus on fixing unpaid super, addressing the gender gap and reducing multiple accounts”.
Industry super funds have been alerting the public to the banks’ lobbying campaign to get their hands on workers’ super nest eggs.
The dismantling of the industry super governance model is clearly the first step.
The Fraser Review into the governance of not-for-profit super funds
Former Reserve Bank Governor and Treasury Secretary, Bernie Fraser, reviewed the governance of not-for-profit super funds. He concluded their member-first ethos is central to their outperformance and their avoidance of scandals affecting other parts of the finance sector. Commissioned in late 2015, Mr Fraser also found the Government had not adequately made the case for a mandatory quota of independent directors, and members’ interests would be better served through a focus on directors’ values, skills and expertise. He recommended not-for-profit super funds prioritise values, skills and expertise in a mandatory principles-based governance code to be overseen by the Australian Institute of Superannuation Trustees (AIST).
David Whiteley is available for interview. Media contact: Lis Bowdler 0412 112 374
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.
Past performance is not a reliable indicator of future performance.
*ISA analysis of SuperRatings Fund Crediting Rate Survey, SR50 - balanced option medians, June 2017