Superannuation Alert 22.10.15
Financial Services eBulletin - 22 October 2015
The Lander & Rogers Superannuation Alert is a brief overview of new developments in the superannuation industry.
- On 16 October 2015 APRA published responses to frequently asked questions (FAQs) regarding APRA's consultation package on governance arrangements for RSE licensees released on 31 August 2015. APRA states that the FAQs 'provide additional information to assist industry as it considers its feedback on the proposed prudential standards and guidance.'
- On 20 October 2015 the Superannuation Legislation Amendment (Trustee Governance) Bill 2015 passed the House of Representatives. The Bill, which now moves to the Senate, amends the Superannuation Industry (Supervision) Act 1993 and the Governance of Australian Government Superannuation Schemes Act 2011 to introduce a proposed requirement that trustees of registrable superannuation entities have a minimum of one-third independent directors and an independent Chair on their boards. The full scope of the amendments are set out in the Explanatory Memorandum to the Bill.
- On 20 October 2015, APRA member, Helen Rowell, delivered a speech titled "Governing Superannuation in 2015 and Beyond: Facts, Fallacies and the Future" supporting the proposed changes contained in the Superannuation Legislation Amendment (Trustee Governance) Bill 2015. In the speech, Ms Rowell states that "APRA's long-held view is that independent directors play a very important, positive role on boards" and that the Government's proposed requirements to have a minimum number of independent directors and an independent Chair on superannuation fund trustee boards "provide an ideal catalyst for all boards to reflect on their current and ideal future governance arrangements, review the changes that are needed and take steps to refresh their approach".
Ms Rowell also highlighted a number of positions in the debate about the proposed reforms that she stated were fallacious, including that independent directors will force fund structure and culture to change, that mandating independent directors will lead to underperformance and that the proposed reforms only affect industry funds.
- On 20 October 2015 the Australian Government released its response to the final report of the Financial System Inquiry that was publicly released on 7 December 2014. The response provides, among other things, that the Government intends to undertake the following superannuation-related measures, with the aim to "improve the efficiency and operation of the superannuation system and in doing so boost retirement incomes":
- develop legislation to improve governance and transparency in superannuation;
- progress the Retirement Income Streams Review;
- task the Productivity Commissioner to immediately develop and release criteria to assess the efficiency and competitiveness of the superannuation system;
- develop alternative models for a formal competitive process for allocating default fund members to products;
- develop and introduce legislation to enshrine the objective of the superannuation system;
- consult on legislation to facilitate trustees of superannuation funds providing pre-selected comprehensive income products for retirement;
- implement legislation to introduce director penalties;
- consult on legislation to improve member engagement; and
- monitor leverage and risk within the superannuation system (as part of the Government's consideration of the Financial System Inquiry's recommendation to prohibit limited recourse borrowing arrangements by superannuation funds).
All information on this site is of a general nature only and is not intended to be relied upon as, nor to be a substitute for, specific legal professional advice. No responsibility for the loss occasioned to any person acting on or refraining from action as a result of any material published can be accepted.