Industry superannuation funds have on average a better level of transparency than retail funds, according to Australian Institute of Superannuation Trustees (AIST) research.
Disclosure by retail funds about the background and remuneration of their directors was particularly inferior, AIST president Gerard Noonan said in the opening address at the Conference of Major Superannuation Funds 2012 in Brisbane yesterday.
Noonan said the organisation looked at a random sample of 10 industry funds and 10 retail super funds, predominantly those of the big four banks and AMP, to find out information about the trustees and directors of both types of funds.
The researcher in charge of the survey was unable to find much detail on the retail super fund directors, Noonan said.
"He had been able only to find the names, but that was all, of directors of two of the five retail funds," he said.
"There was certainly no meaningful data on remuneration, the background of individuals, how the various trusts interacted with each other, or how these directors were constrained on where investments could be made, including in a product that was provided at a profit by the bank that owned the fund.
"Clearly, this is a very different and inferior level of disclosure to that which we expect in our own funds."
However, he also said industry funds could improve their governance and disclosure.
"AIST as a representative organisation of fiduciaries is determined to continue raising the bar on disclosure and responsiveness, recognising that our sector is still not perfect," he said.
The institute released fund governance guidelines in March last year, and Noonan said funds had stepped up their disclosure.
"Now, many have made significant progress, although it is true that there is some distance to go before we can claim mission accomplished," he said.
Noonan's comments were in response to the heightened debate on disclosure of industry super funds, in particular to the comments made by opposition leader Tony Abbott, who claimed these funds were used as vehicles to fund unions.
Yesterday, the Actuaries Institute also weighed into the debate, calling for better disclosure of public offer super funds.
The institute said the requirements for super funds should be brought closer to existing governance standards for banks and insurers.
It said Australian super funds were becoming substantial financial institutions in their own right, with the largest four funds each managing assets of more than $40 billion and the largest 10 managing a combined $348 billion.
But the super regulatory regime was still very different to that for other large financial institutions such as insurers and banks, the institute said.
"Given the size and significance of the sector, APRA (Australian Prudential Regulation Authority) should be provided with the power to impose the highest standards of transparency and governance to our public offer super funds," Actuaries Institute chief executive Melinda Howes said.
