The key superannuation fund governance and reporting changes being pursued by the Federal Government are unlikely to pass unscathed with the legislation’s future now in the hands of the cross-benchers after the Labor members of the Senate Economics Legislation Committee issued dissenting reports.
The dissenting position adopted by the Labor Senators means the future of the legislation changing superannuation fund governance and choice of fund with respect to defaults will be the subject of a horse-trading exercise between the Government, cross-bench senators and the Greens.
The Labor Senators’ dissenting report was particularly blunt with respect to the Government’s proposed changes to choice of fund and suggested that the Government had sought to rail-road the process by introducing the legislation at the end of a sitting period and by imposing a limited consultation period.
The Labor Senators have foreshadowed amendments to the bill in the Senate to “ensure there are no impediments to collective bargaining that would lift superannuation arrangements beyond the community standard” and to “ensure that sufficient safeguards exist when workers exercise choice of fund”.
On the legislation covering governance, the Labor Senators’ dissenting report also foreshadowed significant amendments, arguing that it would “disproportionately impact profit-to-member funds when evidence suggests it is the retail and banking sectors which need Government focus”.
“Labor Senators are not opposed to independent directors as a principle. Where trustee boards believe that independent directors would enhance board decision making they should be appointed,” the dissenting report said. “Many profit-to-member funds have adopted such appointments. However, Labor Senators do not believe in prescribing an arbitrary quota of independent directors and defining independence in legislation.”
The Labor Senators foreshadowed strongly opposing the governance bill.