Senator Nick Sherry, Minister for Superannuation and Corporate Law, has today announced the details of the Review into the governance, efficiency, structure and operation of Australia’s superannuation system including the membership of the Expert Panel and the Terms of Reference.
This follows the release last month of an industry-wide Communique of Principles (also attached) on the Australian superannuation system, which contained an industry resolution that the operational features of our system be examined.
The Review will be headed by a Panel of Experts, made up of a full-time Chair, and five part-time members. The Chair will be Mr Jeremy Cooper, who will move from his current role as the Deputy Chairman of the Australian Securities and Investments Commission (ASIC).
The five part-time members are to be Mr Sandy Grant, Mr Brian Wilson, Mr Kevin Casey, Mr Greg Evans and Dr David Gruen. The full panel brings a wealth of experience from all aspects, covering regulatory, legal, investment fund management, business, economic policy and industry, retail and corporate superannuation sectors. Further background details on each member are attached.
“This is a landmark process, supported by all parts of the superannuation industry, which for the first time ever, will examine the governance, efficiency, structure and operation of our $1.1 trillion superannuation system.”
“The Expert Panel will guide what will be a substantial national project aimed at boosting the retirement savings of all Australians by increasing efficiencies, reducing costs and fees and in turn lifting long-term rates of return,” said Minister Sherry.
Minister Sherry also released the Terms of Reference for the Review, which are structured around examining and analysing Australia’s superannuation system in light of four threshold areas – governance, efficiency, structure and operation.
The Review will report to the Government by 30 June, 2010, although it may report on particular issues prior to that date.
“I am pleased to release the Terms of Reference for the review – they are wide-ranging but focused on the critical four threshold areas of better governance, greater efficiency, improved structures and clearer operations.”
“After some 20 years of compulsory superannuation, and the development of many new features, the Rudd Government and the industry itself strongly agree it is time for such a thorough examination to take place.”
“Our system is strong and people should have confidence in it – but let’s work to make sure that we keep it that way and that we boost the retirement incomes of all Australians”, said Minister Sherry.
The Review will commence its work early in the new financial year and the Panel will call for public submissions and conduct public hearings in due course. The Review will be supported by a secretariat, led by Treasury and with staff sourced from ASIC, the Australian Prudential Regulatory Authority and from the superannuation industry itself.
The Government will shortly advertise for the Deputy Chairmanship of ASIC.
“I would like to take this opportunity to also say that I greatly appreciate the role Jeremy Cooper has played at ASIC – he has made an important contribution to boosting consumer and investor protection, and he will lead this Review with the same expertise and passion he brought to ASIC,” said Minister Sherry.
CANBERRA
29 May 2009
ATTACHMENT
Expert Panel
Chair
Mr Jeremy Cooper – is currently the Deputy Chairman of ASIC, having been appointed in July 2004 for a five-year term. He was previously a partner with Australian law firm Blake Dawson, where he worked principally in the area of mergers and acquisitions and corporate advice for 20 years. Mr Cooper has been a member of the Corporations Committee of the Business Law Section of the Law Council of Australia since 1995 and is a regular speaker on corporate law and financial services issues. While at ASIC, Mr Cooper has had oversight responsibility across a range of ASIC's teams in the financial services sector, including superannuation, financial advisers and consumers and retail investors. Mr Cooper has worked closely in areas such as super fund choice, switching and other industry issues, financial services conflicts of interest, better disclosure and online disclosure, self-managed super funds and issues affecting retail investors, better and simpler advice and financial literacy.
Panel Members
Mr Sandy Grant – has a superannuation and financial services industry background spanning more than 40 years, mainly, but not exclusively in the not-for-profit superannuation fund sector. Positions held by Mr Grant include Managing Director of building industry superannuation fund CBus, Managing Director of Industry Fund Services and General Manager of superannuation administrator Jacques Martin Industry (JMI). Prior to that Mr Grant held various positions with the Colonial Mutual Group where he began his career. Since retiring from full-time work in 2008, Mr Grant has been chair of the policy committee of the Australian Institute of Superannuation Trustees (AIST), director of Members Equity Bank (a full-service bank owned by industry super funds), trustee director of CareSuper, director of the Master Builders Victoria Foundation Ltd and director of fund administrator Superpartners Pty Ltd.
Mr Brian Wilson – a former Australian managing director of the global investment bank Lazard and a former vice-chairman of Citigroup Australia, Mr Wilson has extensive financial services experience including involvement with both the funds management and investment management sectors. Mr Wilson retired in 2009 as a Managing Director of Lazard, after co-founding the firm in Australia in 2004. His career as an investment banker specialising in corporate financial advice encompassed over 30 years. Prior to joining Lazard, he was a Vice Chairman and co-Head of Mergers and Acquisitions at Citigroup Australia (previously known as Salomon Smith Barney Australia) and previously a director and co-Head of Investment Banking at Schroders Australia, a principal of Lloyds Corporate Advisory Services and a Director of Bank of America Australia. Mr Wilson is also Pro-Chancellor of the University of Technology, Sydney.
Mr Kevin Casey – has had more than 40 years experience in the superannuation industry, mainly in the retail superannuation sector. Mr Casey spent 30 years at AMP where he variously managed corporate superannuation relationships, development of superannuation computer systems, superannuation administration procedures and superannuation and technical strategy for AMP’s superannuation businesses. Mr Casey also served as Secretary and a director of AMP Superannuation Limited, AMP’s public offer trustee and was also a member-elected director of the then AMP Officers’ Provident Fund. Mr Casey also sat on joint Government/department/industry committees on the development of superannuation legislation, was a member of the Investment and Financial Services Association (IFSA) superannuation committee and the Association of Superannuation Funds (ASFA) post-retirement committee and after he left AMP, was CEO of the Australian Retirement Income Streams Association (ARISA) before it merged with IFSA in 2002.
Mr Greg Evans – is the Acting Chief Executive Officer of the Australian Chamber of Commerce and Industry (ACCI). Mr Evans is an economist with a background in both the private and public sector. His early career commenced in the banking sector where he specialised in project finance and the financial modelling of large scale infrastructure and resource related projects. Moving to the public sector, he worked for the Commonwealth Department of Finance and later joined the Commonwealth Treasury in the international economy division. Mr Evans has since held positions in various industry associations in the farming and energy sectors. He joined the Australian Chamber of Commerce and Industry in 2004 and in addition to being Acting CEO (through to August 2009) he is the Director of Economics and Industry Policy. Mr Evans holds a Bachelor of Economics from the University of Sydney and a Master of Commerce from the University of NSW.
Dr David Gruen – is Deputy Secretary and Executive Director, Macroeconomic Group at the Australian Treasury, which he joined in 2003. Prior to that, Dr Gruen was Head of the Economic Research Department at the Reserve Bank of Australia between 1998 and 2002. He worked at the Reserve Bank for thirteen years, in the Economic Analysis and Economic Research Departments. With financial support from a Fulbright Postdoctoral Fellowship, Dr Gruen was visiting lecturer in the Economics Department and the Woodrow Wilson School at Princeton University from 1991 and 1993. Before joining the Reserve Bank, Dr Gruen worked as a research scientist in the Research School of Physical Sciences at the Australian National University and holds PhD degrees in physiology from Cambridge University, England and in economics from the Australian National University.
ATTACHMENT
Terms of Reference for a Review into the Governance, Efficiency, Structure and Operation of Australia’s Superannuation System
Scope
- The Review will comprehensively examine and analyse the governance, efficiency, structure and operation of Australia’s superannuation system, including both compulsory and voluntary aspects, addressing, but not limited to, the following issues:
1.1 Governance: examining the legal and regulatory framework of the superannuation system, including issues of trustee knowledge, skills and training; and thoroughly assess the risks involved in the use of debt and leverage and the development of investment options that lead to a weakening of the diversification principle in the superannuation system;
1.2 Efficiency: ensuring the most efficient operation of the superannuation system for all members, whether active or passive members and whether making compulsory or voluntary contributions, including removing unnecessary complexities from the system and ensuring, in light of its compulsory nature, that it operates in the most cost effective manner and in the best interests of members;
1.3 Structure: promoting effective competition in the superannuation system that leads to downward pressure on system costs, examining current add-on features of the superannuation system; and, examining other structural legacy features of the system; and
1.4 Operation: maximising returns to members, including through minimising costs, covering both passive defaulting members, who should receive maximum returns and value for money through soundly regulated default products, and active selecting members, who should not be negatively impacted by conflicts of interest that may inhibit advice being in the best interests of members.
- The Review to be conducted around the concepts of the best interests of the member and the maximising of retirement incomes for Australians.
- The Review to be conducted with reference to improving the regulation of the superannuation system, whilst also reducing business costs within the system.
- The Review will be a systemic examination, including all superannuation fund sectors.
- In conducting its work, and in determining its recommendations, the Review will have regard to the Communiqué of Principles (see separate attachment to this release).
- The Review will comparatively examine international jurisdictions and will consult with experts as needed from other jurisdictions.
- The Review is excluded from considering the issues before the Australia’s Future Tax System review concerning system inputs such as the level of superannuation contributions, taxation including taxation concessions and other incentives.
- The Review is excluded from considering the development of a superannuation clearing house or the project addressing the consolidation of lost accounts, as these are the subject of separate and already commenced processes.
- The Review to be led by an expert panel made up of a full-time Chair and five part-time members, supported by a secretariat drawing on the skills of the key policy and regulatory agencies of the Commonwealth, as well as market expertise. The Review may also draw on external expertise where necessary.
- The Review will consult the superannuation industry, other stakeholders and the broader public.
- The Review will make recommendations to the Government by 30 June 2010 on possible options for reform, including appropriate transitional arrangements. The Review may report on particular issues prior to the finalisation of the final report.