Financial Services Minister Kelly O’Dwyer has pushed through reforms to overhaul the governance of Australia’s $2.3 trillion superannuation system, sparking anger from Industry Super Australia.
The new legislation was introduced on Thursday in a bid to “deliver a strong and modern superannuation system that is solely focused on delivering outcomes for all Australians who rely on these funds to secure their retirement, with a strong prudential regulator,” said Ms O’Dwyer in a statement released on Thursday.
Despite Ms O’Dwyer’s announcement that the package will ensure the highest standards of transparency and accountability across all APRA regulated superannuation funds, Industry Super Australia has accused the government of caving into pressure from banks to dismantle the not for profit superannuation sector.
Chief executive David Whitely said: “Industry Super Australia is concerned that this move gives the banks a ‘leave pass’ on some new transparency and disclosure requirements.
“The government has still not advanced any evidence that their proposals will improve returns for members.
“The evidence is clear: for the ten years to 30 June 2017, SuperRatings monthly data shows, on average, industry super funds have outperformed bank-owned super funds by more than 2 per cent a year*.”
According to a statement released by Ms O’Dywer, the package will:
- Ensure superannuation funds are more transparent and accountable through new reporting of expenses such as annual member meetings
- Strengthen APRA’s powers to regulate funds
- Give workers the right to choose their own super fund
- Improve governance of super funds by implementing a consistent minimum standard for one-third independent directors
- Ensure all workers receive their full superannuation entitlements by closing a legal loophole that some employers are using to short-change workers of their super
- Strengthen all default MySuper products offered across the industry.
A spokesman for Ms O’Dwyer said: “These are long overdue reforms, appropriate to a modern compulsory superannuation system that’s 25 years old, and they apply across all funds; corporate, retail, industry and public sector funds.”
“Superannuation belongs to members and no one else,” she said.
*ISA analysis of SuperRatings Fund Crediting Rate Survey, SR50 – balanced option medians, June 2017