SMSF Association backs independent directors

The Federal Governments move to ensure superannuation funds have one-third of their directors independent, is critical to the governance, the SMSF Association believes.

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.

SMSF Association chief executive, Andrew Slattery, said governance of Australian Prudential Regulation Authority (APRA) regulated funds could not be overstated.

"It's critical to improve the governance of all superannuation funds, and having independent directors and chair is a positive step in this direction," she said.

"Both the Cooper Review (2010) and David Murray's Financial System Inquiry (2014) made this recommendation, strongly arguing that independent directors and chair would improve the governance of large superannuation funds.

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"Increased independence of superannuation fund boards should allow those saving for their retirement, or drawing down on their savings in retirement, more confidence that their funds are being managed and invested in their best interests.

"It is also essential that superannuation funds have a high standard of governance in light of the generous tax concessions they receive to encourage people to grow their retirement savings and save for their future now.

"More broadly, ensuring superannuation funds have quality governance is significant considering the important role that superannuation has to play in Australia meeting the challenge of an aging population over the next 40 to 50 years."