the Fraser Review findings

The much anticipated findings of the Fraser Review – led by Former Reserve Bank Governor and Treasury Secretary, Bernie Fraser – were delivered last month. 

The review, commissioned by Industry Super Australia (ISA) and the Australian Institute of Superannuation Trustees (AIST), analysed the governance model of profit-to-member super funds.

Financial Services Minister Kelly O’Dwyer responded to the report saying the Government was committed to legislation it first attempted to progress through Parliament in 2015, that mandated the number of independent directors on the boards of super funds.

ISA and AIST argue that the current profit-to-member super fund board structure, whose directors equally represent employers and employees, has contributed to these funds outperforming others in the sector.

ISA Chief Executive, David Whiteley said the review: “found that the Government has not adequately made the case for a mandatory quota of independent directors and members’ interests will be better served through a focus on directors’ values, skills and expertise.”

Mr Fraser recommended Australia’s profit-for-member industry superannuation funds prioritise values, skills and expertise in a mandatory principles-based governance code planned to commence from 1 July 2017.

AIST has also released a draft governance code and is currently consulting with industry and holding a number of information sessions around the country. HESTA has provided feedback and is supportive of the code.

HESTA has consistently advocated for super funds to have the flexibility to choose the governance arrangements that best suit their respective needs. This has underpinned the strong, long term achievement of the fund in delivering good outcomes for members.

Continuing to deliver strong long-term returns

Based on a starting income of $50,000 and a starting account balance of $50,000, HESTA has delivered $18,725 more than the average retail super fund over the past 10 years*. This was due to both lower fees and higher investment earnings.