The SMSF Association supports the Federal Government’s proposed legislation requiring APRA-regulated funds to have one third of their directors independent, as well as an independent chair.
The Association’s CEO/Managing Director Andrea Slattery says: “It’s critical to improve the governance of all superannuation funds, and having independent directors and chair is a positive step in this direction.
“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.
“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.”
Slattery says the importance of governance issues cannot be overstated when it’s considered Australian superannuation savings now exceed $2 trillion and are expected to reach $9 trillion by 2040.
“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.”
Slattery says the three-year transition period is a “sensible timeframe” that should minimise any disruption to the superannuation sector.
Source: SMSF Association
