How Do Australian Superannuation Trustees Perceive Their Role and Effectiveness?

Abstract

Private pension laws in Australia concentrate considerable power and discretion in trustees. This paper reviews results from a detailed survey in 2004 of super trustees at the top 200 funds in Australia as well as an earlier pilot survey. The survey results indicate that super trustees emphasise consensus over technical competency. The main survey includes 131 responses from 54 funds with a total of A$103bn of assets under management or about 16% of the Australian market. We find a high degree of consensus among those replying. Trustees are quite confident about their overall financial skills yet at the same time only a small percentage have formal investment or finance training. Trustees have served in their roles for some time and most hold only one trustee role. There is hostility to formal regulation and in particular the new licensing structure for trustees; most trustees seem to view the system as functioning relatively efficiently. Despite the significant differences in benefit structures between the UK and Australia, our results largely mirror those of a very similar survey of UK Trustees from 2001. This may be because prior to the recent introduction of licensing in Australia, the governance structures were actually quite similar.

Keywords: Trustees, Governance, Pension fund

JEL Classification: G23, G3