- The credit statements of some trustees/directors of superannuation funds have been gathered by the financial services royal commission.
- The commission is examining the flow of funds between industry super funds to union and employee organisations.
- Also in the frame is Industry Super Holdings, a service group owned by a group of industry funds, and responsible for high profile marketing campaigns including “compare the pair”.
The financial services royal commission is examining the credit statements of some trustees/directors of superannuation funds.
A group of industry funds has been required to produce statements for credit cards used by any member of the board, the chief executive officer, or any senior member of management.
These funds, not-for-profit entities created in industry sectors, have also had to come up with documents from sponsoring unions and employer or employer organisations.
This is a push by the commission ton understand the flow of funds between the super funds, unions and employer organisations.
The commission is investigating the role of various companies forming part of the group of companies owned by Industry Super Holdings which is owned by a group of industry funds to provide services to those funds.
“We will explore the issue of payments to sponsoring organisations or affiliates with other industry funds,” says Michael Hodge, senior counsel assisting the commission.
“It is particularly important that such payments be carefully monitored because of the obvious potentials for conflicts of interests.”
However, Hodge says the commission’s review of documents identified fewer examples of poor conduct by industry fund trustees than those from retail funds.
“In a number of cases, though certainly not all, the conduct of the industry funds which we have identified as warranting consideration during the oral hearings, is very nuanced,” he says.
Among the funding issues being investigated is the online publication New Daily, originally funded by a group of industry funds but was then transferred to Industry Super Holdings.
AustralianSuper is the largest shareholder in Industry Super Holdings, followed by CBUS, HESTA and Host-Plus.
Industry Super Holdings owns various entities including Industry Fund Services Proprietary Limited which provides financial advice to industry fund members.
Other subsidiaries provide research, policy development, government relations, advocacy and promotional services for industry super funds.
A number of industry funds pay quarterly contributions to fund the services.
Industry Super Holdings is also behind the adverting campaigns “compare the pair” and fox-in-the-henhouse, both of which spruik the benefits of being a member of an industry super fund.
The commission is questioning how spending on such advertising helps super fund members.
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