Govt moves on industry fund governance
The Federal Government has set in motion the legislative processes necessary to impose at least a third independent directors on the boards of industry superannuation funds.
The move is consistent with the Government's policy position taken to the last election and actually fits with the third-third-third position already acknowledged as workable by a number of significant industry superannuation funds.
However the Government's approach also demands an independent chair.
The move was formally announced by the Assistant Treasurer, Josh Frydenberg, early today along with the necessary exposure draft legislation which encompasses a three-year transition.
Frydenberg stressed that the Government's approach was in line with several independent reviews, including the Financial System Inquiry.
The exposure draft legislation proposes that all Australian Prudential Regulation Authority (APRA) regulated superannuation funds, including corporate, industry, public sector, and retail funds, have a minimum of one third independent directors on their trustee board and an independent chair.
The minister's announcement said the new governance rules would not apply to self-managed superannuation funds.
"Further, and consistent with rules that apply to ASX listed companies, trustees of APRA-regulated super funds will be required to report on whether they have a majority of independent directors, on an ‘if not, why not' basis, in their annual report," it said.
"Recognising that a number of existing funds will need to reconstitute their boards as a result of these reforms, the Government proposes a three year transition period will apply from the date of Royal Assent to the legislation" it said.
"However, where an APRA-regulated super fund is established after 1 July 2016 it will have to adhere to the new governance measures from the time it is established."
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