AIST argues for flexibility on fund committee memberships
The Australian Institute of Superannuation Trustees (AIST) has urged the Australian Prudential Regulation Authority (APRA) to be more flexible about who can hold key positions on superannuation fund committees.
In a submission to APRA responding to draft prudential standards, the AIST has taken issue with a proposal that only directors of the superannuation fund can hold the position of chair on key committees.
"This requirement is inflexible and may not be in the best interests of beneficiaries," the AIST submission says.
The AIST submission has come amid concerns expressed by the Federal Opposition about multiple directorships, particularly with respect to industry funds.
The AIST said that while it acknowledged the need for director accountability with regard to committees of the board, it was the current practice of some funds to have external non-directors engaged as committee chairs in specialist areas, "for example investment and audit".
"While AIST recognises that APRA may be aware of particular instances where this arrangement has not been in the members' best interests, the new standards and trustee director obligations will result in these external chairs becoming responsible persons, subject to the new individual fit and proper requirements, and trustees becoming more accountable for the registrable superannuation entity licensee's business operations.
"AIST submits that there are sufficient protections in place through the combination of new standards and new obligations on trustees and individual directors to address any concerns that APRA may have in this area," the submission said.
The AIST also raised issues with an APRA proposal to have remuneration and audit committees comprised only of non-executive directors.
"We know, however, that some funds currently engage non-directors as chairs or committee members of these committees," it said.
"Provided these arrangements are working well, AIST submits that such arrangements should be allowed with appropriate delegations and accountabilities in place, especially with the protections offered by the new legislative and regulatory regime."
Recommended for you
ASIC has released the results of its first adviser exam to be held in 2025, with 241 candidates attempting the test.
Quarterly Wealth Data analysis has uncovered positive improvements in financial adviser numbers compared with losses in the prior corresponding period.
Holding portfolios that are too complex or personalised can be a detractor for acquirers of financial advice firms as they require too much effort to maintain post-acquisition.
As the financial advice profession continues to wait on further DBFO legislation, industry commentators have encouraged advisers to act now in driving practice efficiency.
