Nest eggs may crack under super shake-up
A MAJOR shake-up of superannuation boards will crack the nest eggs of Aussie retirees, industry chief David Whiteley says.
Mr Whiteley, chief executive of, Industry Super Australia, said his organisation was worried about a number of aspects of the Federal Government's draft legislation.
ISA is worried about the government's bid to remove the requirement of not-for-profit funds to include member and employer representatives on their boards.
Mr Whiteley said the legislation could also dilute governance standards for bank-owned super funds, which would be allowed them to appoint a majority of bank executives to their boards.
"The proposals abolish the successful not-for-profit trustee model and, astoundingly, dilute the governance obligations of the poorer performing retail and bank-owned super funds," Mr Whiteley said.
"It suggests the government does not understand that not-for-profit super funds, including industry super funds, deliberately operate in a different way from for-profit funds.
"This difference in culture and profit orientation, overseen by boards that give members and employers a strong voice, has been fundamental in delivering higher returns to millions of members of not-for-profit funds for nearly two decades."
Mr Whiteley said the government needed to retain elements of the current model.
"If the government is intent on merging the two models of governance it would be logical to retain the defining strength of the not-for-profit system - the representation of members and employers, not the other way round," he said.
"Changing the fundamental nature of major financial institutions in the not-for-profit sector which manage $650 million worth of Australians' retirement savings surely deserves greater thought."
- APN NEWSDESK