Super funds urge against three-year exclusion
The Federal Government has been told that people who have provided services to superannuation funds should not be excluded for sitting on their boards as "independent directors" for a period of three years after they retire or otherwise leave their employment.
The Association of Superannuation Funds of Australia (ASFA) has queried one of the key elements of the Government's draft legislation on superannuation fund governance which prescribes a three-year exclusion for such people.
The submission states, "ASFA recommends the definition of ‘independent' should not contain a prescribed three-year exclusion period for a person who has ceased to be employed by a supplier at an executive or director level".
The submission said the ability of such individuals to be considered "independent" should be determined by the super funds "on a case by case basis, with regard to prudential requirements in respect of the identification and management of conflicts of interest".
While supporting the core element of the Government's draft legislation, ASFA is arguing that the independent chairman of superannuation funds should be drawn from the one-third independent directors and has also claimed there should be no assumptions with regard to a one size fits all approach.
"It should also be recognised that there are many different structures and sizes across the sector and a ‘one size fits all' approach may have unintended consequences," it said.
"As such, we urge both the final legislation and APRA prudential standards to be principles based."
Further it has argued that the three year transition arrangements to the new structure should not begin until 1 July, next year.
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