AIST will defend the existing trustee system of governance of superannuation for most Australians, based on it’s 20-plus-year track record, in its submission to the Cooper Review, following a meeting of association members last week.
The meeting took place at AIST’s Australian Super and Investment (ASI) conference on the Gold Coast and followed a member survey. Notwithstanding the tight deadline imposed by the Federal Government review on super, led by Jeremy Cooper, the deputy chair of ASIC, AIST expects to be able to produce a draft response to members prior to the Review’s submissions deadline of October 16.
Fiona Reynolds, AIST chief executive, said that the Cooper Review imposed a deadline of only six weeks for responses to the first phase of questions and she took the opportunity to discuss these at the ASI conference, which had a record 350 delegates in attendance.
The first phase refers to matters of fund governance and included questions such as board composition and representation, elections, conflicts of interest and trustee education levels. There is also a question as to whether funds of a certain minimum size should be encouraged to merge.
“The view of the (AIST) members is that the industry is highly regulated and while we need to operate in a best-practice environment, we’re against any further prescriptive regulation over fund governance,” Reynolds said.
“Our members want us to vigorously defend the record of trustees in Australia,” she said.
Within AIST members, who account for the vast majority of not-for-profit super funds, there was a diversity of governance structures, she said.
Some funds, such as UniSuper and HostPlus, had a ‘3 x 3 x 3’ board composition of three independents, three employee representatives and three employer representatives. Others had member elections for trustees and others had trustees appointed by their industry or trade union bodies.
“Trying to impose a one-size-fits-all governance structure will not allow sufficient flexibility for funds to do what’s best for their members,” Reynolds said.
The second phase of questions from the Cooper Review, answers to which will be due on December 14, have to do with fund operations and efficiency.
The third phase, with answers due on February 19, involve fund structures, including SMSFs.