Pressure on funds to be more open with members

Research released at the Conference of Major Super Funds in Brisbane found that many members were still ignorant of the basic operation of their retirement savings and, although funds had improved their disclosure before new regulatory standards come in next year, there was room for improvement.

As legislation lifting compulsory super contributions to 12 per cent approached a final parliamentary vote this week, research by Essential Media found three quarters of people favoured higher contributions but few understood how their super was invested and paid little attention to annual returns. The poll of 1038 respondents found almost half didn't know where a balanced super fund invested and only 15 per cent knew it could have more than half its assets in shares. Just 22 per cent read their annual statement thoroughly while 15 per cent either didn't recall receiving it or hadn't opened it. Almost a third had only glanced at it.

The ASIC chairman, Greg Medcraft, signalled funds would have to give full details of their portfolios to members and ensure they were transparent and accountable.

This information was critical for members to invest or remain invested in a fund, he said, and one of the reasons so many were choosing to manage their own super was they could see what was in their portfolios.

Member statements also were critical and funds should provide information on how they were tracking against their stated objectives and other funds.

A report on the disclosure standards of 67 not-for-profit funds by the Australian Institute of Superannuation Trustees found many funds were already moving to voluntary full disclosure but there was still room for improvement.

The Australian Institute of Superannuation Trustees chairman, Gerard Noonan, said not-for-profit funds were well ahead of their retail counterparts in disclosing essential information and members of leading not-for-profit funds had no difficulty finding out things like who the people running the fund were.

Mr Noonan hit out at claims the proposed APRA standards would improve governance of not-for-profit funds by requiring boards to include independent trustee directors.

He said company directors, accountants, and lawyers were feeling "left out in the cold" by the current system and saw the regulations as an opening to get involved.