Opposition signals crimping of super trustee power

The Federal Opposition has signalled it would significantly crimp the powers of superannuation fund trustees by making any fund mergers the subject of member ballots.

The opposition spokesman on Financial Services, Senator Mathias Cormann (pictured), has flagged such a move amid reports that a merger of two major industry superannuation funds – Vision Super and Equipsuper – had collapsed.

Commenting on the merger breakdown, Cormann said reports suggested trustees may have been putting their own interests ahead of the best interest of members.

“To scuttle a proposed merger because union-backed trustees don’t want democratic elections but want guaranteed union-nominated positions smacks of institutionalised self-interest,” he said.

Cormann said he believed there should be better regulatory supervision and review of merger arrangements and more adequate remedies for members when the handling of a merger by trustees ended up disadvantaging those members.

“Superannuation funds hold the money of their members on trust,” he said. “Those members should have a say as part of the merger process instead of relying on the trustees doing the right thing in satisfying their trustee fiduciary duties to act in the best interests of their members.”

Cormann said the trustee fiduciary duty could become clouded and give rise to potential conflicts of interest, “especially where some trustees serve on multiple superannuation boards or where trustees have not directly been appointed by the members in the first place.”