The superannuation arms of two major banks issued statements on Friday that said members of APRA regulated funds would be better off having independent chairs for their boards and one third of trustees as independents.
Their applause for Josh Frydenburg’s move to change the governance model of super comes at a time when banks are apparently under investigation by at least one of the regulators.
The charge is that they have sought to win the superannuation business of corporate banking clients through incentives around loans which clearly benefit the employer, but offer no clear win to the employee, who may end up with a poorer performing fund too.
The general tone of the banks’ statements was that “better outcomes for members” would follow from legislation that forces all public offer funds to have this new required level of independence by July 2019.
The grand lie is, as the figures show, most industry funds are getting better outcomes for their members than bank funds.
As the Industry Super Australia put it, the assistant treasurer Josh Frydenburg has no mandate for change. For a political party with a vowed intention of ‘small government’ this legislation appears either frivolous or vindictive.
Industry funds would seem to have every right to sulk, but to their credit many are choosing to adapt. The largest are already in a hunt for the best independents, as the appointment of Jenni Mack to the board of Sunsuper recently illustrated.
It would be good if the bank owned funds could show the same leadership. When carrying out Investment Magazine’s pay survey at the start of the year, the longest time was spent tracking down the names of directors that sit on the boards of the bank managed super funds. Information was found in the darkest most obscure parts of their websites. By contrast, for many industry funds the list of trustee directors is a source of pride, as can be seen here at Kinetic Super.
When is bank super going to see legislation that forces it to be more transparent and accountable in its processes?