On Friday last week, Assistant Treasurer Josh Frydenberg announced the release of exposure draft legislation proposing that independents make up at least one third of the trustee board of APRA-regulated superannuation funds and that they have an independent chair.
The new governance rules would not, however, apply to SMSFs.
However, the SMSF sector has welcomed the government’s announcement as a positive move for the industry overall.
“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,” said SMSFA’s chief executive and managing director Andrea Slattery.
“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,” she added.
Similarly, Chartered Accountants Australia and New Zealand's head of superannuation, Liz Westover, has long advocated for such a move from the government.
“As increasing amounts of Australians assets are tied up in superannuation, the necessity for good governance and transparency over the custodians of those monies cannot be understated,” Ms Westover said.
“These changes will ensure a stronger superannuation system to support the retirement future of Australians."
The SMSF Owners’ Alliance (SMSFOA) also said it has a “vested interested” in ensuring good management of APRA-regulated funds, given that many SMSF members have some of their savings invested in them.
“We expect that an injection of more independent directors to the trustee companies of superannuation funds will lead to better decision making and greater transparency,” the SMSFOA stated.
“It is crucially important that the draft legislation properly defines 'independent'. There must be transparency with regard to the appointment process, the credentials of directors, other positions held, potential conflicts of interest and remuneration,” the alliance said.