Institute Submission - Phase One Governance on the Superannuation System Review

On 16 October, the Institute lodged its submission to the Superannuation System Review (the ‘Cooper Review’) for Phase One: Governance.

The following points were raised:

• The trust model for superannuation funds is appropriate.
• Greater clarity from regulators needed around investment labelling and definitions.
• The Institute does not support mandating for particular investment types by superannuation funds but does support government incentives for investments that promote other public policy objectives.
• Public sector funds should be regulated by APRA in line with other superannuation funds
• The Institute supports the introduction of a trustee board model more aligned with a corporate model to enable a talent pool of professional trustees to be responsible for retirement savings. These trustees to be remunerated commensurate with their skills and knowledge.
• Overall level of trustee skills and knowledge needs to be raised to ensure understanding of trustee roles and responsibilities as well as investments and the services of outsourced providers.
• Metrics should be created by which to measure trustee performance. These metrics and the resulting assessment of trustee performance should be communicated to members.
• A greater level of transparency of trustee boards is needed together with greater levels of disclosure to members across a broad range of issues.
• Until such time as the regulation of stock lending is finalised outside the superannuation environment, the assessment of its placement within superannuation should be put on hold.
• Regulators to consider a review of the penalty regime to ensure penalties are appropriate and commensurate to the nature and extent of breaches.
• The Government should consider mandating for reporting of returns by superannuation funds over specified time frames to ensure consistency and comparability across all funds and to promote the long term nature of superannuation savings and investment.
• The Institute would support leveraging in superannuation funds subject to certain parameters (to be determined following further study) and with clear and frequent disclosure to members.

Article last Updated 3 March 2011