The Senate is blocking plans for independent directors on industry super funds

Photo: Getty/Chris Graythen.

The Australian government appears to have lost its bid for new laws forcing super funds to have independent directors.

Four key independent senators, Jacqui Lambie, Glenn Lazarus, John Madigan and Nick Xenophon, will support Labor and the Greens against the proposal.

The government was pushing to reduce union control over industry super funds. Former assistant treasurer Josh Frydenberg proposed the changes back in July, but the Malcolm Turnbull’s new minister, Kelly O’Dwyer, has failed to convince the senators to support the changes.

The government needs six of the eight crossbench to back tighter rules on the $2 trillion superannuation industry. It argued that many super fund boards, including those designated as not-for-profit, are stacked with union officials or industry figures.

The proposal would have ensured each fund had an independent chairperson and that independent directors make up at least one-third of the board.

Those opposing the proposed legislation pointed to generally better returns for members of not-for-profit super funds compared to retail funds run by banks and other financial institutions.

Senators Lambie, Lazarus, Madigan and Xenophon released a statement saying they will not support a change in the structure of superannuation boards

“Crossbench and opposition senators think this Bill goes too far,” the statement said.

The senators prefer an industry review of not-for-profit fund governance.

“In addition, Senators have also recommended the review consider how industry funds can increase their investment in Australia, thereby supporting the local economy and the growth of jobs,” they say.

There’s more HERE.

NOW WATCH: Briefing videos

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.