POWERED BY MOMENTUM MEDIA
Governance changes will cost $12.3 million a year
The Federal Treasury has estimated the cost of introducing new superannuation fund governance arrangements to be $8.5 million in start-up costs and $12.3 million a year on an ongoing basis.
The Treasury has used a submission to the Senate Economic Legislation Committee to strongly back the Government's legislative changes based around the imposition of at least one-third independent directors including an independent chairman.
It comes against the background of another submission from the Corporate Super Association (CSA) claiming that the costs associated with the changes would be high without delivering equivalent benefits.
The Treasury submission argues that increasing the level of independence on superannuation boards "is the key to improving governance in the superannuation system, thus improving member outcomes".
"Independent directors bring to the board an external, dispassionate perspective, enabling boards to benefit from a diversity of views and providing a check on management recommendations," it said.
"In contrast to directors who may be executives of the RSE [registrable superannuation entity] licensee's business or who represent employers and employees, independent directors are more likely to be free of the types of conflicts that may cause them to (either intentionally or unintentionally) serve the interests of the employer sponsors, a related party or a subset of members, rather than the fund's entire membership," the submission said.
Recommended for you
As the Australian financial landscape faces increasing scrutiny from regulators, superannuation fund leaders are doubling down on their support for private markets, arguing these investments are not just necessary but critical for long-term financial stability.
Australian Retirement Trust (ART) is leaning on its private asset allocation to help shield members from ongoing market volatility, as its chief economist stresses the importance of long-term thinking and diversification.
AustralianSuper is poised to cement its leadership in the superannuation landscape over the next five years, with fresh research forecasting a sharp shift in the sector’s power dynamics.
The Reserve Bank of Australia (RBA) has warned that significant liquidity pressures could arise in the superannuation sector if multiple risks materialise at once, potentially amplifying shocks in the financial system.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
GAM LSA Private Shares AU I
37.08 3 y p.a(%)
2
DomaCom Lot 21 Chellaston Road Munno Para West SA 5115 Australia
32.63 3 y p.a(%)
3
Fidante Credit Suisse Global Private Equity
31.12 3 y p.a(%)
4
Global X GlobalX FANG+ ETF
28.28 3 y p.a(%)
5
Plato Global Alpha A
27.76 3 y p.a(%)
One assumes that this change has come about due to directors of Super Funds not acting independently? If so, which funds are involved? I guess as a director of an Industry fund I could be accused of not acting independtly from time to time due to feeling the need to at all times act in the best interests of members, but then again, could one be more independent then to take such position?