Reform of industry funds is low on the government’s agenda, according to Peter Collins, chair of Industry Super Australia, despite pre-election threats made by Mathias Cormann.
Collins calmed the nerves of delegates at the Australian Institute of Superannuation Trustees’ governance symposium by speculating that the government had at least 50 more pressing issues to deal with, not least because superannuation had not been used as a vote-winning strategy.
Collins has recently met with assistant treasurer and the minister responsible for superannuation, Arthur Sinodinos, and reported a dawning realisation within the government of the greater potential problems posed by self-managed super funds.
The latter issue is one Collins feels strongly about. “There is going to be a disaster in five years’ time,” he told delegates. “Those who have speculated and failed will fall back on the state pension.”
There was also an awareness that retail funds were being overlooked for scrutiny.
“The question has not occurred to some people in government whether the retail sector gets the same attention,” he said.
Triple three and beyond
While the government still had a commitment to imposing a three-three-three trustee representation model (that is, employers, trade unions and independents), this would not be imposed without consultation, predicted Collins.
In this vein, he added that while HOSTPLUS, at which he is an independent director, ran a triple-three model, it was not necessarily one that would suit all funds, and he urged AIST to help fill the governance gap by taking a lead in the training of trustee directors.
Collins also called for greater pragmatism by the Australian Prudential Regulatory Authority on governance. He described the organisation’s desire to create the perfect trustee board as a “quixotic quest”.
“What they are trying to achieve is looking at how to design a perfect board, but we are not starting with a greenfield site,” he said. “You cannot send everyone off to learn about this area. It’s OK for APRA to look at what the ideal features of a board are, but they will never find them. It is a quixotic quest.”
In the speech, Collins revealed a as pet-hate the way some board members felt obliged to make a comment on every single issue.
“Contributions are not measured by the number of times people speak. This can make for very long board meetings. Silence does not mean disinterest. Silence is only important when people will not discuss a big issue.”