Superannuation trustees have lashed out at the federal government’s overhaul of governance within super funds after proposed legislation was introduced to parliament on Wednesday.
If passed, the planned reforms would require all super funds to ensure that at least one third of board members were “independent”.
The proposed legislation also requires that all board chairs be independent.
Eva Scheerlinck, the head of governance at the Australian Institute of Superannuation Trustees, would dilute voice of members on industry fund boards.
“This is a bill that rips the heart of the consumer voice out of superannuation fund boards,” she said.
“There is no evidence that these changes will improve members’ returns.
“Instead they will disrupt the consumer-focused model that has delivered superior performance for not-for-profit funds.”
David Whiteley, the chief executive of Industry Super Australia said the reforms were asking industry super funds to effectively mimic the banks funds.
“These changes – long promoted by the banks – would impose a radical and unnecessary disruption to funds without a shred of evidence of improved member returns,” he said.
“Changing the trustee system to effectively mimic the bank funds will inevitably and over time change the culture, investment philosophy and asset allocation of not-for-profit funds.”
The Financial Services Council, a body representing retail super funds including those owned by banks, is backing the reforms.
“There is no downside for consumers for their super funds to include a proportion of independent directors with diverse skills on their boards,” she said.