Given the findings of the Hayne Royal Commission and the Productivity Commission’s recent superannuation report, the Institute of Public Accountants (IPA) has called for greater guidance and clarification in the Retirement Income Covenant around the obligations of superannuation fund trustees.
IPA chief executive officer, Andrew Conway, said the Covenant needed reform, and to do so would include clarifying the fiduciary relationship between trustees and members of a retirement fund.
“Australia has $2.61 trillion in managed superfunds and this underlines the significant role that the fund trustee plays,” he said.
“Australia needs a framework which acknowledges significant funds being invested, varying levels of expertise and knowledge of trustees, along with their reliance on external experts, to provide further guidance in the Covenant to clarify the obligations of trustees.”
The IPA said it supported Covenant principles that encompassed the development and existence of a retirement income strategy, and facilitated engagement of fund members with decision making on their own retirement.
“Higher levels of financial literacy would also lead to higher levels of fund member engagement as recommended by the Productivity Commission; a recommendation, we strongly support,” said Conway.