The Institute of Chartered Accountants in Australia (the Institute) has criticised Phase One of the Cooper Report for not properly addressing the need for more qualified and knowledgeable superannuation trustees.
In reference to trustee education and knowledge the report said imposing the need for academic, professional or other qualifications “would run counter to the inclusive ethos of representative boards”.
However practice of having a representative trustee board is redundant making the reason for not imposing more stringent knowledge levels flawed, according to Institute head of superannuation Liz Westover.
“Our view is that equal representation is largely irrelevant these days. Industry funds are public offer funds and there are not that many corporate funds around anymore,” she said.
“If we get people on those boards with the skills and experience and the knowledge, that’s got to be a better outcome for the members,” Westover said.
The Institute, however, supported the review’s suggestion that the governance standards of super fund trustee boards be similar to those of a listed company.
But even in this area the review fell a little short, Westover said.
“We’re a bit disappointed that he didn’t see any value in annual general meetings which we see is a great way to disclose information and communicate with members to let the know what’s going on,” she said.
In general the Institute supported the idea of choice architecture but it did have a concern that the perception among members could be that the framework would increase costs.
In addition it did not support the Lifecycle investment option within the universal sector.
“We think trustees would have to make too many assumptions about people to sustain this option. Recently we saw the effect of the global financial crisis meant people have had to work longer than they ever had so how do you prescribe a lifecycle approach in that case,” Westover said.
