POWERED BY MOMENTUM MEDIA
AIST argues for third, third, third
The underlying trust structure of superannuation funds makes it inappropriate to subject them to the same governance arrangements as companies listed on the Australian Securities Exchange (ASX), according to the Australian Institute of Superannuation Trustees.
In a submission filed in response to the Government’s superannuation discussion paper, the AIST has instead argued for trustee boards to be based on the so-called “third, third, third” formula, under which a third of trustees would be employer-appointed, a third union-appointed and a third independent.
The submission, filed with the Government this week, points to “the significant complexities that underlie an attempt to align the superannuation industry with other APRA-regulated industries and listed companies”.
“Superannuation funds are set up as trusts, a structure that has significantly different foundations and obligations, and that is not easily merged with other operating structures,” the submission said.
It said that the AIST supported the trust structure for the management of Australians’ retirement savings and considered “its unique properties to be essential to the continued success of our system.”
The AIST submission conceded, however, that retention of the existing trust structure regime meant the system “does however mean that alignment with other sectors may not be entirely possible in every respect”.
“While we support the ASX Corporate Governance Principles and their definition of independence as it applies in the corporate arena, the straight adoption across into superannuation is unworkable due to the unique nature of superannuation funds,” it said. “AIST submits that the definition for independent director in the SIS Act is an appropriate characterisation of directors outside of the representative pool, and should be maintained.”
Elsewhere in its submission, the AIST backed retention of the existing arrangements around default fund under modern awards, including the role of the Fair Work Commission.
“AIST supports the existing model for the default superannuation fund system in awards, and the role of the Fair Work Commission; however we submit that some of the Productivity Commission’s recommendations could also be implemented to improve the model,” it said. “AIST is also keen to ensure that unnecessary duplication is avoided and that parallel bureaucracies are not created.”
Recommended for you
Jim Chalmers has defended changes to the Future Fund’s mandate, referring to himself as a “big supporter” of the sovereign wealth fund, amid fierce opposition from the Coalition, which has pledged to reverse any changes if it wins next year’s election.
In a new review of the country’s largest fund, a research house says it’s well placed to deliver attractive returns despite challenges.
Chant West analysis suggests super could be well placed to deliver a double-digit result by the end of the calendar year.
Specific valuation decisions made by the $88 billion fund at the beginning of the pandemic were “not adequate for the deteriorating market conditions”, according to the prudential regulator.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
Spire Oaktree Opportunities XI Second Close
61.07 3 y p.a(%)
2
Spire Oaktree Opportunities XI First Close USD
59.21 3 y p.a(%)
3
DomaCom Lot 21 Chellaston Road Munno Para West SA 5115 Australia
31.56 3 y p.a(%)
4
Fidante Credit Suisse Global Private Equity
31.06 3 y p.a(%)
5
DomaCom 4/27 Crombie Avenue Bundall QLD 4217 Australia
26.81 3 y p.a(%)
