Media release
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© 2009 Australian Institute of Superannuation Trustees ABN 19 123 284 275
Friday 16th October 2009
Only not-for-profit funds put members’ interests first
The Australian Institute of Superannuation Trustees (AIST) – the peak representative body for the $450 billion
not-for-profit superannuation industry - has called on the Cooper Review not to tamper with the
Representative Trustee model which has delivered superior retirement outcomes for millions of Australians
over many decades.
In its submission to the Cooper Review released today, AIST argues that there is compelling evidence that
representative trustee directors have performed well in managing member interests and ensuring that
Australia’s superannuation system has contributed significantly to dealing with the nation’s retirement and
economic challenges.
AIST CEO Fiona Reynolds said the not-for-profit model of equal representation stood in stark contrast to
other parts of the finance sector where conflicts of interest and unethical conduct have been widely
criticised.
“In a compulsory system such as superannuation, we need to ensure that individuals who don’t make
active choices about their superannuation do not find themselves in a high-cost default fund that erodes
their retirement benefits,” said Ms Reynolds. “Only the not-for-profit model puts members’ interests first.”
AIST is calling for all default funds – where more than 80 per cent of members have their superannuation
invested - to be managed under this model. It notes that not-for-profit funds have outperformed other funds
by up to 2.4 per cent per annum (estimated to have delivered an additional $10,000 to the average super
fund investor over the past five years).
“We know that most super fund members are disengaged and are unlikely to switch out of the default fund
which is why we believe these funds warrant special treatment,” said Ms Reynolds.
Other key recommendations in AIST’s submission include:
Mandatory training for all new trustee directors as part of their induction;
30 hours of continual professional development as best practice;
A greater focus by super fund boards on succession planning to improve both age and
gender diversity – currently super fund boards are predominantly made up of males
aged over 50;
Requirement for trustee directors to renominate every three years, but no fixed terms;
Disclosure of trustee director fees and the salaries of the fund’s top five employees in
salary bands ;
A regulatory framework to identify and then remove under-performing funds; and
Funds able to reject nominations from sponsoring organisations if they do meet the fund
fit and proper or skill requirements.
AIST is the peak industry body for the $450 billion not-for-profit super sector which includes industry, corporate and public sector funds
covering the super interests of nearly 2/3 of the Australian workforce.
Further enquires or for a copy of our submission contact Janet de Silva, AIST media 0425 745 095
This summary is intended as information only and should not be used in the place of legal or other advice. Australian Institute of
Superannuation Trustees expressly disclaims all liability and responsibility to any person who relies in full, or in part, on any of the
information contained in this summary, or is omitted from it.
NEWS 
