Unions will forcefully oppose any moves by the new Government to put ideology and politics ahead of retirement savings.
Media reports today suggest the Coalition is prepared to gut Australia's world-leading industry superannuation system purely for political reasons.
In the ten years to 31 August 2013, industry funds delivered a return of 7.20 per cent, while retails delivered 5.36 per cent. At the same time industry super customers were only changed 1 per cent of their super balance in fees, while retail funds charge up to 2 per cent.
Despite industry funds having out-performed retail funds in return to members over the short, medium and long, the Coalition has foreshadowed an attack on the best performing category of super funds.
"Why would you attack the governance arrangements of the best performing funds which hold the retirement savings of millions of Australians? There is no governance or prudential issue here, just a dislike of unions. Sadly, some coalition figures see the word 'union' and get the red-mist, regardless of the facts."
This is a transparently political attack on the not-for-profit super system and nothing to do with proper retirement incomes policy. The superannuation regulator APRA has powers to step in and require changes to the structure of a board if it believes there are any governance issues. It hasn't done so because the funds are well-run and tightly supervised by APRA.
Listed companies have independent directors to protect the interests of minority shareholders. There aren't minority shareholders in super fund, as it is about the member's interests. The important thing is that all industry super fund directors are independent of management, unlike in retail funds where Directors are usually an employee of the company that runs the fund. If the Coalition wants to look for governance issues, it should start there.
Industry super funds are run professionally and cop-operatively by a combination of employer, union and, in some cases, independent directors. These governance arrangements have served members well.
Mr Lyons said it was also concerning that, according to media reports, the Coalition is considering changes to the system to favour profit-seeking super funds controlled by Australia's biggest corporate financial businesses.
"The arrangements for industry funds have bipartisan support from the representatives of both workers and industry. But the Coalition seems determined to gut this system to help their mates in the nation's big banks reap even greater profits from the retirement savings of working Australians."
Media contact: Eleni Hale 0418 793 885 or Ben Ruse 0409 510 879