On 22 August, the Superannuation Legislation Amendment (Trustee Obligations and Prudential Standards) Bill 2012 was passed through parliament without amendments, introducing new laws intended to increase the quality of superannuation fund governance. The Bill received Royal Assent on 8 September.
- Requires superannuation trustees to put the interests of members first
- Outlines duties for superannuation fund directors
- Gives the Australian Prudential Regulatory Authority (APRA) the power to make prudential standards for superannuation
APRA has released draft prudential standards, on which it called for submissions and responded to those submissions. It aims to have a final set of standards by December.
In related superannuation news, on 27 August the Financial Services Council (FSC) started a two-month consultation on a draft standard that it has developed from the new “Superannuation Corporate Governance Policy” it released back in March.
The draft standard – binding for FSC members with a public offer or extended public offer RSE (Registrable Superannuation Entity) licence – says that members must have:
A majority of independent directors;
- An independent chair;
- A prohibition on multiple, competing directorships;
- Disclosure of an environmental and social governance risk management policy; and
- Proxy voting record disclosure.
Information on the first four points is all laid out within the draft standard, however, the proxy voting point involves an existing standard that is being reworked. For information on proxy voting requirements, members were urged to reference this separate draft standard.
When the policy was released in March, it also stated that the remuneration of directors and senior management has to be disclosed if it is paid from the trust. However, this has been superseded by the new proposed Superannuation Legislation Amendment (Further MySuper and Transparency Measures) Bill 2012, for which consultation closed in May.
We note that industry superannuation fund Cbus has already made good on its promise back in May to disclose the remuneration of its directors and executives, while Australian Super, SunSuper and HostPlus are expected to follow.
FSC expects feedback before 22 October. Final standards are expected to be issued in December this year, with a projected start date of 1 July 2013. Those requiring more information can visit the FSC’s consultation announcement.