- The financials services royal commission is investigating the conduct of super fund trustees/directors.
- Counsel assisting the commission says Australians can only “peer dimly through the darkness” at how their retirement savings are managed.
- “Can they (trustees) be trusted to do the right thing?” asks Michael Hodge, senior counsel assisting the commission.
The trustees of super funds, essentially company directors who sit on the boards running Australia’s 2.6 trillion retirement funds, are about to feel the heat of the financials services royal commission.
Michael Hodge, senior counsel assisting the commission, told a hearing today that the conduct of trustees isn’t currently covered by the two key regulators, ASIC and APRA.
This has left superannuation fund members to “peer dimly through the darkness” and wondering what was happening with their money, he says.
Hodge asked: “What happens when we leave these trustees alone in the dark with our money? Can they be trusted to do the right thing?”
Australia doesn’t have dedicated conduct regulator for superannuation trustees.
“APRA is, and views itself as, a prudential regulator that adopts a different approach to other regulators. ASIC considers that its jurisdiction in relation to superannuation trustees is limited,” Hodge says.
“So if consumers are unable to do anything more than peer dimly through the darkness of their superannuation trustees, and there is no dedicated and actrive conduct regulator shining a spotlight on the trustees and seeking out bad behaviour, that leaves us with the third possible safeguard for Australia’s retirement savings — reliance on the compliance by the trustees themselves with their duties and legal obligations
“A trustee has a statutory duty … to maintain the fund for the sole purpose of providing retirement benefits … to act in the best interests of members.
“Of course trustees are surrounded by temptation, to preference the interests of their sponsoring organisations, to act in the interests of other parts of their corporate group, to choose profit over the interests of members…”.
Round five of the royal commission is looking at 14 superannuation funds and the two regulators.
Today the commission has witnesses from NULIS Nominees, the trustee for MLC’s superannuation funds.
Business Insider Emails & Alerts
Site highlights each day to your inbox.