The AICD has made a submission to the Senate Economics Legislation Committee which is examining the Federal Government’s Treasury Laws Amendment (Your Future, Your Super) Bill 2021. The AICD confined its submission to Schedule 3 of the Bill on the best financial interests duty.
The AICD did not support the amendments proposed in the Bill. We support strong accountability measures and robustly enforced duties for superannuation trustees. However, taken as a whole, we were not convinced that the proposals achieve the policy intent of increasing the accountability of superannuation trustees in relation to the execution of their fiduciary duties and clarifying the application of the best interests duty.
In particular our submission stated that the AICD:
- did not consider the proposed change to the existing best interests duty necessary. We were also concerned by potential complications that could arise from the proposals as drafted;
- opposed the proposed reversal of the evidentiary burden on trustees;
- opposed the proposed power to ban third party payments via regulation;
- were concerned that the measures proposed could unreasonably interfere with the reasonable discretion exercised by registrable superannuation entity (RSE) licensees and their directors.
We welcomed the changes made to the legislation following the Exposure Draft of the Bill issued in December 2020, in particular the removal of provisions providing for individual liability for directors. We acknowledged the sensible changes to the draft legislation made by the Government which recognised that individual director liability for corporate conduct in Australia is already “uniquely burdensome” and that excessive director liability settings have a number of adverse business and economic consequences.
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