Retail funds accused of driving governance attacks
A panel of industry fund representatives has torn into the retail fund sector and the push for more independent trustee representatives at an Australian Institute of Superannuation Trustees (AIST) governance conference in Melbourne.
AIST chief executive Fiona Reynolds accused the retail sector of driving attacks on the success of the industry funds via the sympathetic interests of the Federal Opposition.
Elements of the Opposition were attacking the industry funds while completely ignoring the retail fund model, she said.
The equal representation system worked and should remain at the heart of the system, she said.
TWU super chair and leading lawyer David Galbally agreed that the current trustee model worked, and said there were more conflicts of interest in the retail sector than ever existed in the industry fund sector, and more chances of things going wrong.
The profits that retail funds were making from member contributions should be investigated, because these profits should be going back to the members only, he said.
Unisuper chair Chris Cuffe said board members already had to get rid of any biases when joining the board.
Being a trustee wasn't just about management and governance, but about understanding how the business was progressing, and not everyone had the skills to understand that, he said.
Galbally suggested that trustee members should go through an education process to understand their responsibilities.
"We don't have a proper program today for our directors or our trustees, we have lip service programs that teach people about phrases," he said.
Experts should help educate boards, and people should work in a team environment and be prepared to listen to these experts, he said.
However, former Cooper Review chair Jeremy Cooper said that determining a minimum qualification for board members had been too difficult a subject for the Review to recommend legislation on.
AGEST Super chair Linda Rubinstein agreed that diligent board members needed training and education, but said the qualifications and experience of union-nominated trustees was being underestimated.
A lot of the pressure to change the system was coming from people in the finance industry who had contempt for ordinary people and who had not covered themselves in glory managing other people's money, she said.
Director of Pillar Administration and member of the Superannuation Complaints Tribunal Noel Davis said that if there were to be changes, they should be applied across the whole sector, not just to the industry funds.
The way forward for the industry might involve adopting the non-profit model, he said.
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