There is one good example of why we need independent directors on superannuation fund boards. That example is REST, the retail superannuation fund.
The Directors of REST are from: the retail union, the SDA; from Coles; from Woolworths; from the Retail Council; and from Myer. There is an independent chairman. Remember this fact.
Within the retail industry there are Enterprise Based industrial Agreements negotiated between organisations who have representatives on the REST board. For example, representatives from Woolworths and the SDA will negotiate an agreement for employees of Woolworths.
In that agreement there is a clause that makes it compulsory for employees to make their superannuation payments to REST. There is no choice.
So, the organisations that run REST negotiate among themselves to make REST compulsory for employees. It also seems that the SDA and Woolworths believe that employees are incapable of making a decision on where to invest their retirement funds.
This situation would not be allowed to occur in other parts of the finance sector where regulations are strong and enforced by APRA and ASIC. Could a bank negotiate with a large business so that employees can only get their pay deposited in that bank?
Perhaps in the EBAs we could have a clause stating that employees can only negotiate their home loans and personal loans with the bank set up by the Industry super funds – Me Bank?
We need to make funds accountable and install independent Directors on superannuation funds.