On 26 June 2015, Treasury released an Exposure Draft” in relation to legislation proposed by the Australian Government, known as “Reforms to Superannuation Governance”. Treasury invited interested parties to make written submissions on the Exposure Draft, to be received by 23 July 2015.
The ACTU has been active in the area of superannuation for more than 30 years, having led the cases in the Conciliation and Arbitration Commission in the mid 1980’s which led to superannuation becoming recognised as an industrial issue and leading to the insertion of superannuation clauses in Awards of the Commission and its successor bodies. The ACTU has also been active in the formation of a number of industry superannuation funds and, together with affiliated Unions, has largely nominated the Employee Representatives to industry superannuation funds.
Industry superannuation funds are generally operated through Trustee Companies which comprise Boards of Trustee/Directors operating under equal representation principles and appointed by the owners of the companies, which are generally the sponsoring Unions and Employer groups. These funds became the principal vehicles into which award superannuation, and later Superannuation Guarantee Contributions have mainly been paid. Industry superannuation funds are recognised to comprise about 30% of monies held in the superannuation sector and represent accounts held for approximately 8 million workers.
Industry superannuation funds have been one of the singularly most successful stories of the Australian financial sector over the past 30 years. Industry superannuation funds have, by and large, been the best performing sector of the superannuation industry, they have grown to represent the majority of the workforce, they have acted in a manner consistent with a charter to represent the interests of the members of the funds and they undertake the significant role of investing some $300 billion of retirement savings on behalf of fund members.
The proposed reforms to Superannuation Governance will have a significant effect on the operation of industry superannuation. It may very well destroy the essential operating features of these funds which in turn would have a detrimental effect on the retirement savings of many working Australians.
The ACTU opposes the legislation, saying that nothing short of it not progressing through the Australian Parliament would be the only solution to ensuring that the successful operating model of industry superannuation is maintained.