Exposure draft legislation to improve governance arrangements in superannuation has been released for public consultation.
The amendments in the exposure draft legislation propose that:
- all Australian Prudential Regulation Authority regulated superannuation funds be required to have a minimum of one third independent directors on their trustee board, and an independent chair;
- the definition of ‘independent’ is to include persons who do not have a substantial holding in the trustee or do not have (or have not had within the last three years) a material relationship with the trustee, including through their employer;
- trustees of funds that do not have a majority of independent directors be required to report on an ‘if not, why not basis’; and
- a three year transition period to apply for existing funds.
The exposure draft legislation takes into account feedback received on the governance reforms in response to the “Better regulation and governance, enhanced transparency and improved competition in superannuation” discussion paper the Government released in November 2013, and in relation to the Final Report of the Financial System Inquiry.