Superannuation trustees are responsible for the compulsory and voluntary retirement savings of millions of working Australians. This responsibility comes with important obligations to act in the best interests of members and to give priority to the interests of members above all others. Trustees are not always discharging those obligations, often causing financial detriment to members. Trustees must improve the performance of their duties. Their role should be restricted in order to avoid conflicts, including by precluding them from acting as dual–regulated entities and prohibiting them from the ‘treating’ of employers. And trustees and their most senior executives should be accountable, in the same way that authorised deposit-taking institutions are accountable under the BEAR.
Members’ interests must be protected. The deduction of fees for financial advice from their accounts should be limited to ensure that such advice is provided only when necessary and to minimise the prospect of fees being deducted for services that were not provided. For MySuper accounts, no deductions for ongoing advice fees should be permitted. The unsolicited offer, or hawking, of superannuation products to individuals should also be prohibited.
Finally, the roles and powers of APRA and ASIC should be adjusted to enable better supervision of superannuation entities and more effective enforcement of the duties owed by trustees and by directors of trustees.