Chapter 2Super fund governance and operations

2.1This chapter considers the role of superannuation fund governance arrangements in delivering positive retirement outcomes for Australians. In particular, the chapter considers governance arrangements with reference to:

the independence and competency of superannuation trustees;

capital requirements for superannuation funds;

the effectiveness of the Best Financial Interest Duty; and

insurance standards in superannuation.

2.2The chapter concludes with the committee’s views and recommendations.

Overview

2.3Since 1992, Australian workers have been required to compulsorily save for their retirement using the superannuation system. Today, superannuation funds oversee approximately $2.8 trillion of Australians’ retirement assets, with workers contributing billions of dollars more to the superannuation system each year.[1]

2.4Given the significance of superannuation assets to individuals’ retirements and to the economy, the governance arrangements that underpin the sound operation of superannuation funds is of vital importance. The Super Members Council, the peak body for profit-to-member superannuation funds, noted the important role trustees have in managing Australians’ retirement savings:

As the super system matures, so too does the responsibility and expectation on those who are entrusted with protecting and growing Australians' precious retirement savings. Super is Australians' money for their retirement and they rightly expect and deserve the highest standards of service from their funds and insurers…[2]

2.5However, concerns have been raised, including during this inquiry, regarding aspects of current governance arrangements, as set out further below.

Independence and competency of superannuation trustee boards

2.6Superannuation funds in Australia are set up as trusts for which the trustee ‘acts on behalf’ of a registrable superannuation entity licensee (RSE licensee).[3] While superannuation trustees typically outsource many of their administrative and investment management functions to external entities, trustees ‘cannot outsource their responsibility for the performance of those functions’.[4] Indeed, trustees have ultimate responsibility for the operation of their funds.[5]

2.7Given that superannuation trustees play a critical role in ensuring the sound management of Australians’ retirement assets, the composition and capability of trustee boards is a matter of critical national importance. Yet, evidence considered by this inquiry suggests that, in some instances, superannuation trustees may have failed to act in the best interest of fund members.

2.8The following section considers how the governance practices of trustees may be improved in respect of:

the equal representation model of board composition, including the appointment of independent directors;

the fit and proper process for the appointment of board directors and other responsible persons; and

the mix of skills and experience on trustee boards, including the operation of the equal representation model.

Equal representation of trustee boards and independent directors

2.9Under the Superannuation Industry (Supervision) Act 1993 (SIS Act), most superannuation funds are required to maintain an equal representation board structure. This means a superannuation trustee board must have an equal number of employee representatives and member representatives.

2.10Superannuation trustee boards are not required to have independent directors, however the SIS Act provides that an equal representation board can opt to appoint an independent director. The SIS Act defines an ‘independent director’ as a director that:

is not a member of the fund;

is not, or is not an associate of, an employer-sponsor of the fund;

is not an employee of an employer-sponsor of the fund, or the employee of an associate of the employer-sponsor of the fund; and

is not a representative of a trade union representing one of more members of the fund, or another kind of organisation that represents the interests of one or more employer-sponsors of the fund.[6]

2.11The Australian Prudential Regulation Authority (APRA)—responsible for the prudential regulation of the superannuation sector—has stated that, in its view, a ‘prudent equal representation Board would consider the benefits of the appointment of at least one independent director’.[7] Further, APRA has stated that a non-equal superannuation trustee board should also consider appointing independent directors:

A non-equal representation Board might similarly consider the benefits of the appointment of one or more directors who are free from any business or other association that could materially interfere with the exercise of their independent judgement. Such directors broaden the skills and capabilities that can be brought to the board table, and improve decision-making by bringing an objective perspective to issues the board considers. They are also well placed to hold other directors accountable for their conduct, particularly in relation to conflicts of interest.[8]

2.12There have been long-standing public debates as to whether equal representation model for the boards of superannuation delivers the best outcomes for members. In particular, questions have been raised as to whether trustee boards would benefit from additional independent directors.

Findings from the Cooper Review and the Murray Inquiry

2.13A number of inquiries have identified concerns regarding the governance practices of superannuation funds and made recommendations which ‘if implemented, would significantly change the current board structure of industry superannuation funds away from an equal representation model’.[9]

2.14Two such inquiries include:

the 2009–10 Review into the Governance, Efficiency, Structure and Operation of Australia’s Superannuation System (Cooper Review); and

the 2013–14 Financial System Inquiry (Murray Inquiry).

2.15The Cooper Review, led by Jeremy Cooper, a former deputy chair of the Australian Securities and Investments Commission (ASIC), considered that changes were required to the structure of trustee boards, noting that contemporary best practice in corporate governance for listed companies included the presence of independent directors on the board.[10]

2.16Given this, the Cooper Review stated that a minimum number of 'non‑associated' trustee‑directors should be required on all superannuation trustee boards—to ensure that they can genuinely influence the decisions of those boards.[11] In particular, it recommended the following:

[Recommendation 2.6] The SIS Act should be amended so that if a trustee board does not have equal representation, the trustee must have a majority of ‘non‐associated’ trustee‐directors[.][12]

[Recommendation 2.7] For those boards that have equal representation because their company constitutions or other binding arrangements so require, the SIS Act should be amended so that no less than one‐third of the total number of member representative trustee‑directors must be non‐associated and no less than one‐third of employer representative trustee‐directors must be non‑associated.[13]

2.17Further, the Murray Inquiry, led by Mr David Murray AO, the inaugural chair of the Future Fund Board of Guardians and a former chief executive officer of the Commonwealth Bank of Australia, recommended the following:

Mandate a majority of independent directors on the board of corporate trustees of public offer superannuation funds, including an independent chair; align the director penalty regime with management investment schemes; and strengthen the conflict of interest requirements.[14]

2.18In its response to the recommendation to mandate independent directors, the then Turnbull Coalition government agreed with the need to ‘improve the governance of superannuation funds’, and noted that it had introduced legislation requiring superannuation fund trustee boards to have a minimum of one-third independent directors—including an independent chair.[15] The Explanatory Memorandum for the Superannuation Legislation Amendment (Trustee Governance) Bill 2015 (the 2015Trustee Governance bill) emphasised the importance of increasing the independence of superannuation trustee boards:

The existing representative board composition requirements in the SIS Act are outdated and no longer reflect the size and complexity of the superannuation industry. In particular, equal representation is out-of-step with other corporate sectors, including listed companies, banks, and general insurers, who all, at a minimum, recommend a majority of independent directors with an independent chair.[16]

2.19However, the then Labor Opposition did not support the independent director reforms contained in the 2015 Trustee Governance bill, claiming it was ‘attempting to fix a problem that does not exist’.[17] As Senator Sam Dastyari said:

And the success of industry super funds that have consistently performed well has been built in part—not entirely; there are other factors at play—by a successful governance model. This bill goes to the heart of destroying that governance model. And, again, what amazes me is that this is a solution in search of a problem.[18]

2.20The 2015 Trustee Governance bill subsequently lapsed at the prorogation of the 44thParliament.[19]

2.21Two years later, then Coalition Government introduced the Superannuation Laws Amendment (Strengthening Trustee Arrangements) Bill 2017 to require RSE licensees to ‘have at least one-third independent directors and for the Chair of the Board of directors to be one of these independent directors’.[20] Again, Labor Opposition senators did not support the bill and it lapsed at the end of the 45thParliament.[21]

2.22Notably, recommendations for increasing the independence of superannuation trustee boards have been opposed by industry super funds, which have argued that the ‘current equal representation model is fit for purpose, as evidenced by the fact that industry superannuation funds consistently outperform their peers’.[22]

Should the rules regarding trustee boards be updated?

2.23Over many years, various bodies have considered the adequacy of the rules regarding the composition of superannuation trustee boards.

2.24For instance, the Australian Institute of Company Directors (AICD) has ‘long maintained that the inclusion of a minimum level of independent directors on RSE boards would represent a positive improvement to governance arrangements in the sector’.[23] The AICD reasoned that:

Independent directors, that is, directors who are not aligned or perceived to be aligned with either management or other interests, bring a unique perspective and valuable experience to board deliberations.

The inclusion of independent directors would align the superannuation sector with internationally recognised best practice governance standards. It would also bring additional oversight and governance of related-party transactions, which were identified as a continuing problem by the Productivity Commission.

The equal representation rule no longer reflects the practical reality of the superannuation sector, particularly in relation to large public offer funds.[24]

2.25As noted by the AICD, the Productivity Commission similarly has ‘concluded that best practice from a corporate governance perspective would include the presence of a “critical mass” of independent directors on RSE boards’.[25] Moreover, the Productivity Commission observed that ‘it is of equal importance (and arguably matters more) to ensure that funds have thorough processes in place to recruit highly skilled and experienced boards as it is to focus on the number of independent directors’.[26]

2.26The Menzies Research Centre submitted that ‘[t]here is strong evidence to support the calls for more independent directors for our largest funds’.[27] The Menzies Research Centre continued:

The process of examination, improvement and feedback of the superannuation governance environment is key. It is also imperative that the public become more interested in superannuation fund governance since its aim is to reduce the residual safety net obligations of the Commonwealth around pensions and other government-funded sources of social security. Given this industry holds over $3.5 trillion in assets on behalf of the Australian people it should be subject to the highest standards of governance.[28]

2.27In responding to a question on notice regarding whether it supported the appointment of independent directors on the boards of superannuation trustees. the Super Members Council said:

Independent directors are defined in section 10 (1) of the SIS Act which underpins APRA’s prudential framework in relation to independent trustees. Many profit-to-member superannuation funds with an equal representation model also appoint independent directors and chairs, as set out in APRA’s Prudential Practice Guide SPG 510 Governance (SPG 510). Each super fund determines the best director mix to advance the interests of that fund’s members.

2.28Notwithstanding the above views, some inquiry participants argued in favour of the equal representation model for trustee boards.

2.29The Hon Wayne Swan, Chair of Cbus Super, expressed the view that ‘one of the great things about the equal representation model is that we have people from employers, unions and all political parties’.[29] Mr Swan elaborated on the benefits of having both employee and union representation on Cbus Super’s board:

I think it's enormous. It brings a reality and a life experience to the board that wouldn't otherwise be there. In the case of Cbus it makes us very close to our members, which is why we run our partnership programs, for example. They are aimed at not only educating our membership but at retaining and increasing membership. For the directors on the board who are in contact with delegates or with employers, being out there on the job and talking to our members is absolutely essential. I won't speak for the employers on our board, but I'm sure that if they were answering this question they would say the same. For the building industry to have a dedicated specialist fund, such as Cbus, is a huge boon not just for employees in the industry but also for employers in the industry.[30]

2.30Further, Mr Swan argued that the equal representation model had contributed to the relative outperformance of industry funds:

Over 40 years, the sorts of returns that industry funds have developed have had a lot to do with our governance structure—sponsoring organisations, the equal representation model—it can't be a coincidence. I think it has been the key to industry funds outperforming other funds.[31]

2.31Additionally, the joint submission from Chartered Accountants Australia and New Zealand (CA ANZ) and CPA Australia argued in favour of including ‘retiree representatives on the boards of equal representation trustee boards’.[32] In particular, CA ANZ and CPA Australia stated:

Based on the above APRA regulated super fund data, it can be seen that retired members have significant assets in those funds. But who represents their interests if the trustees are mostly taken from sponsoring employers (or employer associations) and related unions or union organisations?

We consider this to be a major flaw in the prudential framework and prompt legislative corrective action is essential. We recommend that retirees have representation on equal representation trustee boards.[33]

Fit and proper requirements for responsible persons

2.32A RSE licensee is required to ensure that individuals ‘in positions of responsibility are fit to hold those positions’.[34] A responsible person of an RSE licensee includes:

a director of the RSE licensee;

a secretary of the RSE licensee;

a senior manager of the RSE licensee;

an auditor of the RSE;

an RSE actuary who is appointed under RSE licensee law; and

a person who performs activities in connection with the RSE where those activities could materially affect the RSE operations.[35]

2.33To manage prudential risks regarding responsible person positions, an RSE licensee is required to maintain a board-approved policy which specifies how the RSE will assess the fitness and propriety or a responsible person position, among other related provisions.[36] Regulatory guidance SPS 520 from APRA provides that an RSE’s fita proper policy must‘consider the nature and extent of a number of matters in conducting fit and proper assessments’, including:

(a)the person’s character, competence and experience relative to the duties involved, including whether the person:

(i)possesses the necessary skills, knowledge, expertise, diligence and soundness of judgement to undertake and fulfil the particular duties and responsibilities of the role in question; and

(ii)has demonstrated the appropriate competence and integrity in fulfilling occupational, managerial or professional responsibilities previously and/or in the conduct of their current duties; and

(b)whether the person:

(i)has demonstrated a lack of willingness to comply with legal obligations, regulatory requirements or professional standards, or been obstructive, misleading or untruthful in dealing with regulatory bodies or a court;

(ii)has breached a fiduciary obligation;

(iii)has perpetrated or participated in negligent, deceitful or otherwise discreditable business or professional practices;

(iv)has been reprimanded, disqualified or removed, by a professional or regulatory body in relation to matters relating to the person’s honesty, integrity or business conduct;

(v)has seriously or persistently failed to manage personal debts or financial affairs satisfactorily in circumstances where such failure caused loss to others;

(vi)has been substantially involved in the management of a business or company which has failed, where that failure has been occasioned in part by deficiencies in that management;

(vii)is of bad repute in any business or financial community or any market; or

(viii)was the subject of civil or criminal proceedings or enforcement action, in relation to the management of an entity, or commercial or professional activities, which were determined adversely to the person (including by the person consenting to an order or direction, or giving an undertaking, not to engage in unlawful or improper conduct) and which reflected adversely on the person’s competence, diligence, judgement, honesty or integrity.

2.34Central to the fit and proper process is the requirement for a person in a responsible position to have skills and experience commensurate with the position. As outlined in APRA’s regulatory guidance SPS 520:

…the skills and experience required by each responsible person depend on the person’s role. This, in turn, is affected by the role undertaken by other responsible persons. For example, a director is generally expected to understand the role and responsibilities of a director and have a general knowledge of the entity, its business and its regulatory environment. However, each director is not generally expected to have all the competencies that the Board collectively needs if other directors have those competencies or they are obtained from external consultants or experts and the Board does not unquestionably rely on their advice.[37]

2.35Despite the importance of superannuation trustee boards having the right mix of skills, the Super Members Council advised that it does not provide industry standards or guidance to its members in relation to trustee governance, including how to best utilise a skills matrix, beyond the ‘broader strong regulatory framework’ of the prudential standards.[38]

APRA’s role in director appointments to trustee boards

2.36Under the SIS Act, APRA can commence court proceedings which, if successful, disqualify a person from being a director of a superannuation trustee.[39]

2.37However, when concerns are raised regarding whether a person who is nominated to be a director of a superannuation trustee meets the fit and proper persons requirements, there is currently no regulatory power for APRA to intervene. As Ms Carmen Beverley-Smith, Executive Director, Life and Private Health Insurance and Superannuation, APRA, explained:

APRA doesn't hold powers to determine who should and shouldn't be a director of a trustee of a super fund. APRA has prudential standards that go to determining the governance requirement of super funds, and we supervise to those. They include the fitness and propriety of directors, whether conflicts of interest are managed appropriately and other governance requirements. What we require of super funds is that they have adequate policies, procedures and frameworks in place to make good decisions in relation to those topics.[40]

2.38The lack of a regulatory power was considered in the 2019 APRA Capability Review—part of the response to the Hayne Royal Commission—which recommended:

The Government should consider providing APRA with a non-objections power to veto the appointment or reappointment of directors and senior executives of regulated entities. This would bring it into line with international regulators and strengthen its capacity to pre-emptively regulate GCA risks. The power should be available to APRA only where the risks associated with the entity, including but not limited to member outcomes for superannuation funds, warrant it.[41]

2.39In July 2019, the then-Treasurer, the Hon Josh Frydenberg, issued the Australian Government’s response to the APRA Capability Review and addressed the non-objections power recommendation as follows:

The Government will ensure that APRA has sufficient powers and flexibility to prevent inappropriate directors and senior executives from being appointed or re-appointed to regulated entities, as part of extending the Banking Executive Accountability Regime.[42]

2.40From 15 March 2025, the Financial Accountability Regime (FAR)—which replaced the Banking Executive Accountability Regime—will apply to superannuation trustees.[43] The FAR will extend APRA powers to take administrative action to disqualify a person from ‘acting as an accountable person if the person has breached their accountability obligations’.[44]

2.41The FAR subjects accountable entities to enhanced regulatory notification obligations, including by providing ASIC and APRA an ‘accountability statement for each of their accountable persons describing the responsibilities of that person’.[45] However, while APRA’s template accountability statement proposes that an accountable entity report on conflict management processes,[46] the FAR Act does not make explicit provisions for conflict of interest concerns.

2.42Also of note, APRA’s prudential guidelines provide an expectation that board renewal policies should document the maximum tenure period for each director and note long tenures ‘can affect a person’s capacity to exercise independent judgement.’ The practice guide further explains:

APRA expects that the length of each director’s tenure would be examined shortly before the end of each term served and that there would be limited circumstances in which maximum tenure limits exceeding 12 years would be appropriate.[47]

2.43Despite this, it appears some superannuation board directors have served on their respective boards for more than 12 years without APRA intervention.[48] APRA’s 2018 thematic review of superannuation board practices found ‘examples of RSE licensees introducing a maximum tenure for directors but resetting the commencement of the director’s term from the date of the (revised) policy rather than the date of original appointment of that individual to the board.’ APRA noted:

This allowed existing long-term directors to remain on the board for another maximum term of up to 12 years, demonstrating a tension with the spirit and intent of the prudential framework.[49]

Concerns regarding the independence and competency of the Cbus Super board

2.44The Construction and Building Unions Superannuation Fund (Cbus Super) is an industry superannuation fund with membership primarily drawn from the construction, building and allied sectors. As of mid-2024, Cbus Super had 920000 members and had $94 billion of assets under management.[50]

2.45However, as discussed below, several independent reviews have raised concerns regarding whether the Cbus Super board:

has appropriate independent director representation; and

has appropriate processes for appointing fit and proper directors.

Independent director representation

2.46In 2014, a former Australian Competition and Consumer Commissioner, ProfessorGraeme Samuel AC, was appointed by Cbus Super to conduct a review into the fund’s governance arrangements following alleged breaches of privacy laws within the fund. ProfessorSamuel’s review recommended several changes to Cbus Super’s organisational structure, including the need for increased independent directors and an improved framework for managing conflicts of interest..[51]

2.47Of relevance to this inquiry were Professor Samuel’s recommendations that:

the Cbus Super trustee’s conflicts management framework ‘be enhanced to specifically and more robustly address fundamental conflicts of interest arising out of associations and allegiances of Cbus employees…who in the past had had or still hold an association with a sponsoring organisation’;

the constitution of the of the Cbus Super board be restructured such that:

the appointment of the board chair is ‘clearly independent’;

the board be empowered to approve a director nomination before a director can be appointed;

additional independent directors should be appointed with ‘no clear association with any sponsoring member organisation’; and

the provisions for independent directors’ voters rights be amended to reflect the requirements of the SIS Act.[52]

2.48Currently, the Cbus Super board is comprised of ‘an equal number of member and employer representative directors, as well as two independent directors’.[53] The two independent directors are Cbus Super’s Chair, the Hon Wayne Swan, and the Chair of the Risk Committee, Dr John Edwards.[54]

2.49In giving evidence to the committee, Dr Edwards told the committee Cbus Super had acted on the recommendations from the Samuel review:

As the chairman says, it recommended that we appoint more independent directors. At that point, we had one—I think we now have two. More importantly, under the Samuel recommendation, the chair would be an independent, and that is now the case.[55]

2.50As the committee understands it, the independence test that applies to the appointment of the Cbus Super chair is self-assessed. In contrast, the Australian Securities Exchange Group (ASX) Corporate Governance Council’s Corporate Governance Principles and Recommendations (4th Edition, February 2019), which recommend a majority of directors and chairs of listed entities be independent, provides clear guidance on the meaning and importance of ‘independence’, and explains:

To describe a director as “independent” carries with it a particular connotation that the director is not aligned with the interests of management or a substantial holder and can and will bring an independent judgement to bear on issues before the board.

It is an appellation that gives great comfort to security holders and not one that should be applied lightly.

A director of a listed entity should only be characterised and described as an independent director if he or she is free of any interest, position or relationship that might influence, or reasonably be perceived to influence, in a material respect their capacity to bring an independent judgement to bear on issues before the board and to act in the best interests of the entity as a whole rather than in the interests of an individual security holder or other party.[56]

2.51APRA provides in its Prudential Standard CPS 510 Governance the following definition of independent directors:

For the purposes of this Prudential Standard, an ‘independent director’ is a non-executive director who is free from any business or other association – including those arising out a substantial shareholding, involvement in past management or as a supplier, customer or adviser – that could materially interfere with the exercise of their independent judgement.[57]

2.52The same document then provides a list of circumstances which will not meet the independence test, including such things as:

the director being a substantial shareholder of the institution,

the director having previously been employed in an executive capacity of the institution without a three year gap between said employment and the commencement of service on the board,

the director having been a principal of a professional advisor or consultant to the institution within three years of commencing service on the board;

the director having been a material supplier, customer, or having a material contractual relation with the institution.[58]

2.53On the face of it, the committee would question whether a senior office holder of a major political party would, in the context of an appointment as chair of an industry superannuation fund at the centre of current policy and political discourse, would meet independence tests such as those set out above.

2.54Notably, Professor Samuel has emphasised the importance of the Cbus Super having an independent Chair:

“It’s a very powerful position to hold as chair. It sets the tone and culture of the organisation, and a clever and assertive chair can actually set some directions around the board tone and can curtail or enhance discussion.

“If they’ve got a tendency or history towards supporting certain groups, then you’ve got a problem. And Wayne Swan is the perfect example of a political operative, so then you’ve got to question the absolute independence of the chair.”[59]

2.55The independence of superannuation trustee boards is particularly pertinent in relation to probity of financial agreements involving member contributions.

2.56Yet, there have been ongoing concerns regarding potential conflicts of interest between the representation of member sponsoring organisations on the Cbus Super board and the significant financial agreements Cbus Super has with those organisations. In 2024, Cbus Super paid a total of $2.8 million to five unions for directors’ fees, industry partnership payments and rental payments.[60] Nearly two thirds of that amount was paid to the CFMEU,[61] which holds three seats on the Cbus Super trustee board.

2.57The financial arrangements between superannuation funds and sponsoring organisations are considered further in the section of this chapter on capital requirements.

Fit and proper processes at Cbus Super

2.58In November 2024, Deloitte was commissioned to undertake an independent review of Cbus Super in response to concerns from APRA ‘about whether board members were fit and proper and whether certain expenditures were being made in accordance with the Best Financial Interests Duty’.[62]

2.59The Deloitte review ‘made recommendations for improvements in relation to the process and documentation for fit and proper, against the backdrop of a finding that Directors met the fit and proper person test’.[63] The review’s findings included that:

the board skills assessment, including related processes, require uplift to reflect the expanding size and complexity of the business;

the annual assessment of fit and proper places an over-reliance on the director declaration and skills assessment;

a mechanism should be established to enable nominated directors to be rejected if required;

there is insufficient documentation of the exceptional circumstances surrounding the extension of director tenure; and

the potential conflicts of interest arising from a director’s representation of a union or employer are not recorded in the register of relevant interests and relevant duties.

2.60In particular, the Deloitte review found that Cbus Super’s board skills assessment processes had fallen short in respect of its assessment of the skills of individual directors and that Cbus Super had failed to consistently apply a skills matrix for this purpose. As the Deloitte review detailed:

There is currently no formal validation or review of Directors’ skills self-assessment by the Company Secretariat team. This means that although the Board’s skills are ultimately assessed as a collective, there is no review or challenge of individual Directors’ ratings to determine whether those ratings are reflective of an individual’s actual skills and experience or that the rating matrix is being applied consistently. As an example of the challenges this lack of review can cause, Directors are required to provide a rationale where they rate themselves as Expert but in the most recent self-assessment, this rationale was not recorded in 51% of instances where an Expert rating was given for a skill set, making it difficult to accurately understand the skills and capability of the Board.[64]

2.61Deloitte made several recommendations to Cbus Super aimed at addressing the above findings. In response to a question on notice, Cbus Super said it is ‘working with Deloitte to develop an action plan to address each of the recommendations of its independent review’.[65]

2.62During the inquiry, the committee questioned the nomination of Construction, Forestry and Maritime Employees Union (CFMEU) officials as directors of the Cbus Super board. Earlier, the Australian Government had placed the CFMEU into administration following serious allegations of bullying, intimidation and corrupt conduct within the union.

2.63At a committee hearing, Mr Peter Kohlhagen, General Manager at APRA, outlined how the administrator of the CFMEU had exercised the union’s rights as a shareholder of the Cbus Super trustee company to nominate appointments to the board:

…the process here is that the shareholder—in this case the administrator exercising the rights on behalf of the shareholder—makes a nomination of directors to the board. It's then for the trustee to undertake their process to assess whether those people, those nominees, are fit and proper. And it's not until that process is complete that those people would actually take up their seat on the board and become trustee directors.[66]

2.64APRA confirmed it could not veto director appointments to Cbus Super’s board.[67]

2.65In giving evidence to the committee, Mr Swan defended the appointment of the CFMEU officials to the Cbus Super board, stating that fit and proper processes had been conducted and the directors were ‘were appointed in line with those processes’.[68] CbusSuper added that the Deloitte review ‘concluded that all current and nominated Directors on the Cbus Board meet the ‘fit and proper’ test as at the date of the report’.[69]

2.66Further, the committee questioned Cbus Super on its process for appointing DrEdwards to the position of Chair of the Risk Committee. The committee heard that, prior to his appointment, Dr Edwards had acquired risk management skills ‘on the board of Cbus over the previous four or five years’ and ‘in other board roles prior to that’.[70] However, Dr Edwards advised he did not have specific risk management experience beyond that.

2.67Mr Swan defended also the appointment of Dr Edwards, stating that:

I completely and utterly reject that characterisation of Dr Edwards. Dr Edwards is a great Australian who has extensive experience across the board in both the private and public sector. He spent years as a chief economist to a large commercial firm, which I will not name, where he gained a large amount of private sector experience. He is a world renowned economist who is well read and also well practised in discussions of the economy and in wider areas. To suggest that he is not capable, or that he should not be able to be the chair of a risk committee in an insurance fund, is preposterous.[71]

Best financial interest duty

2.68The committee also explored the effectiveness of the Best Financial Interest Duty (BFID) requirements, introduced as part of the Your Future, Your Super reforms in 2021 with the aim of strengthening trustees accountability when executing their fiduciary duties. Trustees must provide demonstratable evidence in the event of civil proceedings that expenditure and investment decisions were in the best financial interest of beneficiaries (rather than just ‘best interest’).

2.69The BFID requirements include three components:

Require each trustee of a registrable superannuation entity (RSE) or self‑managed superannuation fund to perform the trustee’s duties and exercise the trustee's powers in the best financial interests of the members.

Require each director of the corporate trustee of an RSE to perform the director’s duties and exercise the director’s powers in the best financial interests of the members.

Reverse the evidential burden of proof so that the onus is on the trustee of an RSE to point to evidence that their actions were consistent with the best financial interests duty in a civil penalty proceeding.[72]

2.70Treasury conducted a review in 2022 of the Your Future, Your Super reforms, including consideration of the BFID.[73] The review did not result in any changes of the duty by government.

2.71In July 2024, APRA released amended prudential standards and practice guidance,[74] to apply from July 2025, in relation to strategic planning and member outcomes. Specifically, the guidance sets out:

design principles for a robust expenditure management framework – including board oversight, alignment to strategic objectives, and active monitoring and review;

APRA’s view that better practice is for trustees to obtain a yearly attestation from accountable senior executive management that they are taking reasonable steps to meet the requirements in SPS 515 regarding expenditure management; and

APRA’s view that such attestation should confirm that controls are in place and operating effectively to prevent expenditure that would be unjustifiable in the context of the duty to act in the best financial interests of beneficiaries.[75]

2.72As noted in the committee view below, there can be a lack of clarity regarding compliance with the BFID outside of circumstances where APRA is taking action. For instance, APRA’s recent enforcement action against Cbus Super to ‘address material prudential concerns’ resulted in the fund trustee being required to adhere to a rectification plan to implement all recommendations of the independent Deloitte review into Cbus Super, including in relation to ‘fundamental deficiencies across policies, practices, governance and oversight that primarily concern fitness and propriety processes and expenditure management’.[76]

2.73APRA stated that addressing the above issues will ensure the Cbus Super trustee is ‘better equipped to consider and prioritise members’ best financial interests in its decision-making, ultimately leading to improved member outcomes’.[77]

2.74Issues regarding super funds’ compliance with BFID obligations, along with issues relating to problems that can arise with directors and chairs who may have conflicts of interest, are also highlighted in regulatory action taken by APRA to disqualify First Super co-chair, Mr Michael O’Connor. In addition to his role as First Super co-chair, Mr O’Conner is also the National Secretary of the Manufacturing Division of the CFMEU. APRA’s action follows its investigation of a contract between First Super and the CFMEU for member and employer services (MESC contract) which concluded in 2023. APRA alleges that:

1. Mr O’Connor approved the appointment of a CFMEU employee to perform a full-time role under the MESC contract and:
   1. was aware that the employee continued to undertake a significant portion of work for the CFMEU;
   2. directed or approved the employee carrying out the work for the CFMEU;
   3. was aware that First Super was paying fees under the MESC contract, which included an amount covering the full-time wage of the employee; and
   4. did not inform or seek approval from First Super for the employee to carry out work for the CFMEU or seek to reduce the fees payable by First Super under the MESC contract.
2. Mr O’Connor was involved in the negotiation of the extension of the MESC contract on behalf of the CFMEU in circumstances where he was in a position of conflict.[78]
   75. APRA is alleging that, in his conduct, Mr O’Connor breached:

… a number of the director covenants contained in the Superannuation Industry (Supervision) Act (SIS Act) including the covenants to act honestly, exercise the same degree of care, skill and diligence as a prudent superannuation entity director would exercise, act in the best financial interests of beneficiaries, and to prioritise the interests of beneficiaries when in a position of conflict.[79]

2.76According to a recent media report, Mr O’Connor has denied APRA’s allegations. In his defence filed with the Federal Court in December 2024, Mr O’Conner stated that he had recused himself from First Super board members over the contract and that he had not spoken to other board members about the contract extension in question. Mr O’Conner’s defence also stated that he had declared his interest in the manufacturing division in the trustee’s conflict register. At the time of writing, the matter was ongoing and remained before the court.[80]

Evidential burden

2.77There is minimal transparency on the day-to-day operation of the BFID other than court documents, media releases and Senate Estimates Hansard. This is inaccessible to consumers in the main.

2.78In 2021, APRA wrote to all RSEs emphasising evidentiary requirements to support BFID decisions. APRA advised:

The best financial interests duty (BFID) sharpens the focus of all RSE licensee decisions, including on expenditure and investments. This reform places the onus firmly on RSE licensees to ensure, and demonstrate, that all decisions are consistent with the best financial interests of their members. Decisions must be supported by strong analysis and evidence in light of the implications of reversal of the burden of proof.[81]

2.79The Revised Explanatory Memorandum to the Treasury Laws Amendment (Your Future, Your Super) Bill 2021 further explains:

Trustees should assess the costs and benefits of actions, which will commonly include quantifiable metrics to demonstrate what the anticipated financial outcome is and the reasonable basis for that expectation.[82]

2.80Treasury confirmed to the committee that a trustee would be obligated to record how it was complying with the duty. Ms Neena Pai, First Assistant Secretary, Retirement Income and Superannuation Division, Treasury advised that to support the legal obligation on trustees to ensure they are acting in the best financial interests of their members, their decisions ‘need to be supported by evidence and analysis’.[83]

2.81Of note, BFID decisions are not reported to APRA. The reverse onus of proof only applies to civil proceedings commenced by the regulator.[84]

2.82In relation to APRA’s role enforcing these requirements, Ms Pai explained:

APRA is responsible for taking action where there is evidence that a trustee has not acted in the best financial interests of members, and APRA has released and published a letter that speaks to how it's intensifying its supervisory approach in relation to superannuation fund expenditure.[85]

Adequacy of documentation

2.83There are indications that some funds may not be meeting requirements to adequately document BFID in decision making.

2.84Recent enforcement action by APRA resulted in some funds being subject to review under additional licensing conditions.[86] Deloitte’s 2023 independent review of Cbus Super made 26 recommendations across a number of areas, including around ‘the process and governance of complying with BFID.’ Deloitte wrote:

It is our assessment that lack of consistency, appropriate process, appropriate governance, and necessary rigour, are all areas for improvement and currently lacking for the determination as to whether expenditure decisions have been made in the best financial interests of members.[87]

2.85Deloitte explained that its review:

…makes a number of recommendations with respect to the design and operation of the BFID arrangements – in the interests of developing appropriate information and documentation to drive better decision making by the Board and management.

2.86Cbus Super has agreed in principle to the recommendations and the findings of Deloitte’s review, and is working with Deloitte and APRA to address the recommendations, including developing an action plan to strengthen its BFID framework.[88]

Types of expenditure

2.87Concerns have been raised around particular categories of expenditure where BFID may be more difficult to establish because the return for members is harder to quantify, such as for discretionary or non-essential activities. This may include marketing (advertising, sponsorship and promotional material) expenditure, events, partnership agreements, research, subscription fees and outsourcing to related third parties.

2.88For example, in its review Deloitte investigated Cbus Super’s approach to expenditure on partnership agreements, advising it required stronger documentation evidencing BFID considerations. Deloitte highlighted the need for Cbus Super’s partnership proposals to be uplifted to:

Articulate how the stated purpose aligns to member outcomes (e.g., lower costs, fees, improved benefits) in addition to business outcomes (growth in Members or funds under management);

Align analysis on financial benefits to member outcomes, including clear metrics quantifying how scale will impact Members and sensitivity analysis;

Set expectations for oversight during and post the period of the proposed Partnership Agreement, including how the agreement will be monitored to ensure that it continues to meet its intended purpose;

Provide details of the financing approach, including timing and proposed funding source.[89]

2.89Cbus Super announced it has begun to address the Deloitte recommendations, including ‘improvements in the way the Fund documents the value that industry partnership arrangements generate for the Fund and our members’.[90] Cbus Super further stressed:

The independent review has also notably observed that industry partnership arrangements are “an important mechanism through which industry superannuation funds achieve brand awareness, retain members and ultimately grow membership”.[91]

2.90The committee also enquired about the benefits to Cbus Super’s members arising from events such as Cbus Super’s 40th anniversary celebrations, with consideration of BFID requirements. The event, costing around $387 000, was an in-person event for 750 attendees consisting of employees, stakeholders and industry representatives, and incorporated ‘an all staff strategy forum’. MrSwan advised the committee that the cost was met using a pre‑allocated budget for staff professional development.[92]

2.91In answer to questions on whether the event and venue hire would be in members’ best financial interest, Mr Swan stated:

I'm certain it would have met the best financial interest test because it was an integral part of developing the fund, celebrating its history and learning the lessons of what it means for the future of the fund.[93]

2.92Similarly, the committee enquired about BFID considerations around the CFMEU’s ownership of 21 per cent of Cbus Super.[94]In response to questions, Treasury officials reiterated that:

… irrespective of the governance of the board and the composition of the board, it's very clear that trustees have a legal obligation to act in the best financial interests of their members. They have a legal obligation to prioritise their members' interests where there is a conflict of interest. They have an obligation to ensure their directors meet the fit-and-proper test, and, if those obligations aren't met, APRA is responsible for taking action.[95]

2.93The committee put written questions on notice to Cbus Super regarding partnership agreements and research expenditure, seeking information on the purpose of the agreements and details of when relevant BFID assessments were conducted.[96] Cbus Super referred the committee to its 2023–24 reporting disclosure document ‘additional details about expenses’ which lists expense details and explains:

Super funds are required to publicly disclose certain types of expenses to members, so they can access meaningful information about their super fund. Below are further details about the expense categories:

Promotion, marketing and sponsorship payments

Payments to industrial bodies

Related party payments.[97]

2.94The Cbus Super expenses report does not provide any detail about BFID assessment process or timelines for the expenditure in question.

Capital requirements

2.95The committee inquired into the risk of superannuation members’ funds being expended for various super fund capital requirements, including to pay for fines incurred by trustee board members. This is further discussed below.

Personal liability for trustees and the use of members’ funds

2.96Following the conclusion of the 2017–19 Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry (commonly known as the Hayne Royal Commission), in November2020 the then Treasurer, the Hon Josh Frydenberg MP, introduced the Financial Sector Reform (Hayne Royal Commission Response) Bill 2020 into the House of Representatives. Among other things, the bill made superannuation fund trustees personally liable for breaches of Commonwealth law.[98]

2.97As explained in the bill’s explanatory memorandum:

… Part 2 [of schedule 9 of the bill] amends the SIS Act’s [Superannuation Industry (Supervision) Act 1993] existing indemnification rules to prevent superannuation trustees and their directors from using trust assets to pay criminal, civil or administrative penalties incurred in relation to a contravention of any Commonwealth law.[99]

2.98The AFR stated that this amendment posed a challenge for non-profit industry super funds as, unlike bank-owned funds with shareholder capital, they are held by trustee companies with little funding. Hence, it noted that a fine could quickly render a trustee insolvent.[100]

2.99To address this issue, following passage of the bill in December 2020, a number of Australian industry superannuation funds applied through state courts to amend their trust deeds to permit the imposition of levies on fund members to build 'trustee risk reserves' to reimburse trustees and directors for fines they may be liable for.[101]

2.100For example, in late 2021, the South Australian Supreme Court approved AustralianSuper’s application to amend its trust deed, allowing it to impose an annual risk fee on its members of 0.015 per cent of fund assets—equivalent to approximately $35 million.[102] Similarly, several other super funds, including Cbus Super, QSuper, Hostplus, and Spirit Super sought court approval to use members’ money to pay fines incurred by directors.[103]

2.101As reported by the AFR in November 2021, AustralianSuper’s then newly appointed chief executive officer, Paul Schroder, suggested that the fund’s members were 'effectively' AustralianSuper’s shareholders—rather than the Australian Council of Trade Unions and the Australian Industry Group, which are its legal shareholders. He said:

[Members are] taking all the risk if their money is inside this...pool, and what we’re doing is just creating a risk reserve to cope with risks that we might need to fund along the way.[104]

2.102Cbus also updated its trust deed in December 2021 to allow the Cbus trustee to take a 'trustee services fee' from the fund. The funds collected from this fee were to be set aside in the trustee’s own account and used to cover the costs that the amended legislation prevented a super fund from reimbursing. In explaining these changes, Cbus stated:

From 1 January 2022 a trustee cannot pay for certain costs, like trustee penalties, out of the assets of a super fund. We have a strong track record of complying with superannuation laws, but this new law presents a unique challenge for trustees of profit-for-member super funds like Cbus.

Cbus and other profit-for-members super funds don’t have access to separate funding of its own to meet costs like these. So while for-profit super funds (e.g. retail funds) will have their own income and funding available, industry super funds have had to develop an alternative method to cover these costs and manage these financial risks.[105]

2.103As reported by The Australian, analysis of APRA data undertaken by the Coalition indicated that Cbus’ administration fees had increased since the change to its trust deed—from $97.5million in 2020 to $211.1million in 2023.[106]

2.104APRA was involved in the majority of these cases, appearing as amicus curiae (friend of the court) to 'ensure the courts were fully appraised of all relevant legal matters, including the new best financial interests duty, the context of the amended provisions and principles of prudent practice'.[107]

2.105A number of stakeholders raised concerns regarding this trend to amend trust deeds following passage of the bill. For example, in an address to the Australian Financial Review Super and Wealth Summit in Sydney on 22 November 2021, the then Minister for Superannuation, Financial Services and the Digital Economy, Senator the Hon Jane Hume, said the following:

Recently, a number of super funds applied to the Courts seeking permission to charge members a new fee to build a trustee financial contingency reserve.

And let’s not kid ourselves as to what this really is; taking member’s money out of their retirement savings to set up a pool of funds ‑ owned by the trustee ‑ to ensure they can pay for penalties due to their own misconduct.

As you’ve just heard me say, so many of the Government reforms are about lowering fees and protecting retirement savings. So the application of a whole new category of fee charged to members, I feel, is a retrograde step.[108]

2.106As part of its broad inquiry into Australia’s four major banks and other financial institutions, on 10 February 2022, the House of Representatives Standing Committee on Economics (House Economics Committee) held a hearing into the issue. In a media release, the then Chair of the committee, Jason Falinski MP, stated the following:

Amendments to Section 56 of the [SIS Act] were made as part of the Government’s response to the Hayne Royal Commission to protect the funds of members by preventing trustees from using these funds to pay for fines incurred by their own actions. However, there have been wide reports of superannuation funds seeking judicial opinions to contravene this provision.

The committee deserves an explanation from APRA, ASIC and Treasury as to how they are interpreting these new provisions, and what actions they will take to ensure that the decisions made by Parliament are not easily and carelessly overturned. The committee would like to know how superannuation trustees could fund their penalties, and ways to do so that do not put member’s funds at risk or increase their fees.[109]

2.107In her opening remarks to the House Economics Committee at the hearing on 10 February 2022, an Executive Board Member of APRA, Ms Margaret Cole, explained:

In late 2021 … several RSE [registrable superannuation entity] licensees applied to the various state courts for advice and direction in regard to amending the trustees to enable the charging of fees with a view to building a financial contingency reserve on the trustee balance sheet.

…

[W]ithout the ability to build and maintain a risk reserve, an otherwise well‑run and well-performing trustee could be rendered insolvent by a minor operational administrative error such as submitting data one day late, resulting in a maximum penalty of $11,100. A disorderly failure of an otherwise sound and sustainable licensee would be likely to be severely detrimental to members, as it would likely impose material costs and create significant operational risks.

…

Based on the facts of the applications, their analysis of the wording of the amended provisions and the relevant legal precedent, the courts concluded that the charging of a fee of this nature is not inconsistent with the amendments to section 56(2) and section 57(2) of this act.[110]

2.108This issue was also raised at the committee’s hearing on 14 November 2024, where the Chief Strategy Officer of AustralianSuper, Ms Paula Benson, clarified who ultimately paid regulatory fines:

CHAIR:Let's talk about the regulatory fines issue. If AustralianSuper gets a regulatory fine, whom pays? Is it the members or is it the unions and employer groups?

Ms Benson:In the instance where the fund is fined, that is paid from the trustee risk reserve.

CHAIR:Whom pays for that?

Ms Benson:The trustee risk reserve is funded by administration fees and investment returns for members.

CHAIR:The members, yes?

Ms Benson:Yes.[111]

Arrangements with member and employer sponsoring organisations

2.109As reported by Sky News, data released by the Australian Prudential Regulation Authority (APRA) in October2024 revealed that major superannuation funds spent more than $400million in members’ savings on marketing and sponsorship in the 2023 financial year. A number of superannuation funds, including AustralianSuper, Cbus, and First Super, paid unions a total of about $14 million in the same period—this included $3.8 million paid to the Construction, Forestry and Maritime Employees Union (CFMEU) and the Construction, Forestry, Maritime, Mining and Energy Union (CFMMEU).[112]

2.110Just prior to APRA releasing the data, its deputy chair, Ms Margaret Cole, wrote to all RSE licensees noting that:

Despite obligations on RSE Licensees to consider the best financial interests of their members and consistently to promote those interests, APRA has observed deficient practices and questionable expenditure in some areas.[113]

Cbus

2.111As disclosed in Cbus’s 2024 annual report, marketing and promotion of the fund included partnership arrangements with the fund’s member and employer sponsoring organisations. In the 2023–24 financial year over $2.8 million was paid, or payable, to the fund’s sponsoring organisations for these partnership payments, as well as for directors’ fees and rental payments—this included over $1.8million directly to CFMEU alone.[114] Please see figure 2.1 below.

Source: Construction and Building Unions Superannuation Fund, 2004 Annual Report, p. 46.

AustralianSuper

2.112As disclosed in AustralianSuper’s 2023–24 annual report, a number of related party transactions occurred, including payments to directors and committee members, and those for advertising, marketing, and education services. In the 2023–24 financial year, this amounted $1.2 million paid to four unions: Australian Manufacturing Workers’ Union, Australian Workers’ Union, Finance Sector Union, and United Workers Union.[115] Please see figure 2.2 below.

Source: AustralianSuper, Annual Financial Report 30 June 2024, p. 58.

2.113The committee understands that these substantial transfers make it clear that the shareholders are prepared to take significant funds from the super entity but are not placing capital into the entity to meet regulatory fines. These directors' fees and other 'sponsorships' do not include the multiple millions paid by the funds to union-affiliated industry bodies.

Insurance standards

2.114Superannuation regulations require that life insurance policies, including TPD cover, are included as part of default superannuation insurance arrangements, with many superannuation trustees also including income protection insurance as part of this cover.[116]

2.115Seventy per cent of Australians who hold life insurance hold that insurance through their superannuation fund, and over $5 billion paid out in insurance claims to superannuation fund members in 2020.[117]

2.116Clearly, life insurance products, and sometimes income protection insurance, are central to the value and service Australians expect from their superannuation funds. However, during this inquiry various concerns were raised regarding the standards that apply to insurance products provided through superannuation, including problems that have arisen in relation to payouts for death and total and permanent disability (TPB) claims.

Claims delays

2.117Evidence to the committee suggests that delays in insurance claims handling may be a significant problem in the superannuation industry. In its submission, AFCA noted that the ‘top issue raised in complaints…about superannuation over the past three financial years (2021-2023) related to delays in claims handing.’[118] This made up 19 per cent of the complaints AFCA received relating to superannuation during that period.[119]

2.118AFCA explained the severe impacts such delays can have on consumers:

The impact of delay is significant, affecting consumers at a time of often acute vulnerability as they manage the financial consequences of a life changing episode of illness or disability. Lengthy or unnecessary delay in claims handling can amplify confusion, uncertainty, and stress navigating an already complex process at a difficult time.[120]

2.119In its submission, AFCA listed what it had found to be the cause for delays in the processing of superannuation related insurance claims:

Poor processes that see repeat requests for the same or irrelevant information.

Complexity and a lack of trustee oversight of the insurer's handling of a claim.

Lack of clarity about the process to be followed in making a claim.

Reliance on 'standard' letters or templates over more tailored communications.

Poor or incorrect information (on websites, product documentation, or from call centres).

Under-resourcing or poor performance on the part of outsourced administration providers.

Under-resourcing within trustee offices.

Reduced ability of trustee staff to keep pace with ‘business as usual’ while also managing work associated with mergers and successor fund transfers.[121]

2.120APRA noted in its submission that ‘there are multiple factors that contribute to delays – including insufficient trustee oversight of resourcing and processing of clams; lack of timely response to issues identified; and time required to validate correct beneficiaries and their identities.’[122]

2.121The Council of Australian Life Insurers (CALI) confirmed that this was an issue it took seriously and it had been engaging with superannuation industry associations in order to improve claims handing at an industry level.[123] In its submission, it set out that the ‘Life Code of Practice’ provides timeframes for life insurers to obtain all required information, complete inquiries and make a decision on a particular claim. These timeframes are:

For income protection (‘income-related claims’): two months from when the insurer is notified of the claim, or two months from the end of the waiting period, whichever is later

For death and TPD claims (‘lump sum claims’): six months from when the insurer is notified of the claim or from the end of any waiting period, whichever is later.[124]

2.122CALI reported in its submission that the average time for a decision to be made in a superannuation related insurance claim in the period of six months to July 2023 was:

2 months for income protection insurance;

4.9 months for TPD insurance; and

1.1 months for death insurance.[125]

2.123However, it also noted that the data from AFCA showed that timeframes had not been met for some claims and reiterated AFCA’s reports that there had been an increase in the amount of complaints related to insurance claims handling in superannuation.[126]

2.124Ms Mary Delahunty, CEO of the Association of Superannuation Funds Australia (ASFA), provided more context at a public hearing:

It might be important for the committee to note that the death benefit space is complex by nature because there are two decisions to be made. There's an insurance component to the decision and there is the superannuation payout as well. We call it a death benefit payment and it has those two components to it. So, as you can imagine, there are a number of parties involved. As it's an untimely death, there can often be some complexity to the requirements that a fund and insurer need in the paperwork area. When we're looking at policy changes, for example, to streamline death certificates across state, territory and other jurisdictions, that goes to that easing of paperwork.

ASFA's members provided a guidance note that will help to raise the standards of funds that are making these difficult decisions and going through these complex arrangements. While that guidance note doesn't provide, I understand, any comfort to the individuals who have experienced poor service, it should provide some comfort to the committee looking at a systemic level that there are improvements on foot and that the sector understands they need to improve in this area.[127]

2.125Ms Nina Pai, First Assistant Secretary of the Retirement Income and Superannuation Division at Treasury, confirmed that Treasury was currently engaging with ASIC on ‘a piece of work’ looking at minimum response times for superannuation funds to process insurance claims.[128]

Cbus Super insurance claim delays

2.126On 12 November 2024, ASIC filed an originating application in the Federal Court of Australia for civil penalty proceedings against United Super Pty Ltd as the trustee for Cbus Super. The proceedings related to allegations made by ASIC that Cbus Super had contravened various sections of the Corporations Act.[129]

2.127In its media release ASIC claimed that ‘more than 10000 members and claimants of the Construction and Building Unions Superannuation Fund were impacted by death benefits and total and permanent disability insurance claims taking more than 90 days to be processed…’[130]

2.128Further to this, ASIC alleged that CBUS may have contravened the following sections of the Corporations Act:

ss 912A(1)(a) & (5A) by failing to act efficiently, honestly and fairly in the handling of its members’ claims for death benefit payments and TPD insurance payments;

section 912DAA(1) and (7) for failing to lodge a reportable situation report within 30 days of becoming aware of a reportable situation; and

Section 1308(5) for failing to take reasonable steps to ensure the breach report lodged on 5 August 2023 was not false or misleading in a material particular.[131]

2.129At a public hearing on 14 November 2024, Mr Kristian Fok, CEO of Cbus Super stated:

I do want to again say sorry for the impact that the delays in processing insurance claims have had on our members and their families. We are committed to do better and we will. Many of our members hold high-risk jobs where injuries and death are more common. We know that delays in processing claims can add to their distress at a difficult time. I want to reassure the committee that we remain focused on our members and their best financial interests and, like many institutions experiencing rapid growth, it has taken time for Cbus to mature and attract the right personnel to meet our needs.[132]

2.130Mr Fok stated further that roughly 80 per cent of the claims related to the litigation commenced by ASIC had been resolved and that the members and their beneficiaries had received $755 million in benefits. He also pointed out that Cbus’ insurance claim payouts were higher than the industry average at around 97 per cent.[133]

2.131In his evidence before the committee, Mr Fok was adamant that Cbus Super was not withholding money and would not stand to benefit from doing so. While taking responsibility for the delays, he stated that the delays had primarily emanated from Cbus Super’s administrator and the fund was working to rectify the delays. He confirmed that Cbus Super was initiating a number of actions in order to prevent such delays from occurring.[134]

2.132Mr Fok did concede that some members were still suffering from the delays as Cbus Super worked through the payments, but it was priority for Cbus Super to fix this. He confirmed that Cbus Super had put in place a compensation scheme, designed with ASIC’s compensation guidelines in mind, for members who had suffered as a result of the delays.[135]

2.133In response to a question, Mr Fok told the committee he did not want to ‘speculate’ on who, out of the members of the fund or the trustee company owners, would pay any fines which may be levied against Cbus Super if there was a finding made against it in the case brought by ASIC.[136]

2.134At another public hearing, Cbus Super’s insurer, TAL Life Limited gave evidence. Ms Jenny Oliver, Chief Executive of Group Life and Retirement at TAL, said in response to a question that she was unable to offer any insight on why there had been a delay in the payment of benefits to Cbus Super’s members.[137]

2.135Asked about potential incentives within the contractual terms between TAL and Cbus Super for less claims to be paid, Ms Oliver told the committee she did not think such incentives existed, and pushed back against the characterisation of a ‘bonus payment’ to Cbus Super if less claims were made:

What I think you are referring to is what we in the industry typically call 'premium adjustment models'. The objective of a premium adjustment model is primarily to ensure that members of superannuation funds pay efficient and fair premiums. We recognise there is uncertainty in determining what the ultimate claims experience will be, but we determine the initial premium based on our best estimate. But there can be variations and volatility in that. A premium adjustment model works to align the ultimate premium to the actual claims rather than the expected claims, and it does that by reviewing the claims that are received against the initial expectations. That can see adjustments in premiums made over time. That can see payments flow between the insurer back to the fund, into their insurance reserves. Similarly, we can see payments go from the superannuation fund back to the insurer. It is not a sharing of profit; it is an adjustment to the premiums over the longer term.[138]

2.136At a further public hearing, Mr Wayne Swan, Chair of Cbus Super, was asked whether the fund used a risk and control matrix in order to mitigate risks, such as insurance payment delays. Mr Swan confirmed that Cbus Super does have a risk matrix and it was further confirmed by Dr John Edwards, Chair of the Board Risk Committee at Cbus, that payment of insurance claims was ‘an important element in our risk control framework.’[139]

2.137Through further questioning Mr Swan placed responsibility for the delays in insurance payments on Link Group, Cbus Super’s external administrator.[140]

2.138At the same hearing, Cbus Super was asked to provide their risk and control matrix to the committee which was taken on notice.[141] On 13 December 2024, Cbus Super responded to the committee’s request to provide the register:

The Fund’s risk register contains sensitive and confidential information and therefore is not able to be disclosed publicly.

The Fund’s risk framework outlines how it identifies and manages risk, including insurance risk and the elements of that process. See pages 34-35 of the Cbus Annual Integrated Report 2024 for further information about how the Fund identifies and manages risk.[142]

2.139As at the time of writing, Cbus Super has not provided the committee with its risk and control matrix.

Recent developments

2.140On 28 January 2025, the Albanese Government announced a new mandatory service standard for the superannuation industry. The Treasurer, the HonDrJim Chalmers MP, and the Minister for Financial Services, the Hon Stephen Jones MP, advised in a joint media release that the new standards will apply to ‘all large APRA-regulated superannuation funds’, targeting problem areas such as:

The timely and compassionate handling of death benefits;

Fair and efficient processing of insurance claims; and

Clear, respectful and accessible communications with members.[143]

2.141The government further announced that ‘Treasury will work closely with consumer advocates, regulators and industry stakeholders to develop the standards. Draft standards will be released for public consultation.’[144]

2.142A further recent development relates to Rest Super and the charging of insurance premiums. According to reporting, members of Rest Super had been charged insurance premiums for insurance they had opted out of. A statement from a Rest Super spokesperson stated that this error had affected only ‘a small number of uninsured Rest members’:

Once identified, the error was addressed quickly and the impact was limited to less than 2500 members…Rest wrote to the impacted members to inform them of this mistake, and advised them how to cancel the insurance and have any premiums refunded.[145]

Committee view

Independence and competency of superannuation trustee boards and governance standards

2.143Superannuation trustees have a critical role to play in ensuring the sound and effective management of the assets of fund members. Evidence to the committee underlined the importance of getting the composition and capability of trustee boards right, and the risks that arise when this does not happen.

2.144Independent directors, as this committee heard, can expand the skills and capabilities of boards, and enhance decision-making by providing boards with an objective perspective. Independent directors will also help hold other directors to account, and help guard against conflicts of interest, and in doing so protect the interests of fund members.

2.145The committee considers that governance of superannuation trustee boards would be similarly enhanced by a requirement for the appointment of independent Chairs. The committee also considers that the governance of superannuation trustee boards would be further enhanced by mandating additional skills requirements for directors.

2.146As noted earlier in this chapter, superannuation trustee boards are not currently required to have independent directors or an independent Chair. The committee believes this needs to change to ensure that that the superannuation industry is subject to the highest governance standards possible.

2.147The committee also believes that the current fit and proper processes for appointing directors of superannuation trustee boards need to be more robust. In particular, the committee considers new competency rules should be introduced to mandate relevant director experience requirements. Further, the committee considers that the appointment of directors should be made more transparent by requiring superannuation trustees to publish the skills matrix used in their fit and proper assessments.

2.148The committee has significant reservations regarding Mr Paddy Crumlin’s continuing role on the board of Cbus and considers that he fails to meet the 'fit and proper persons test' required of superannuation fund board members, including how the fit and proper assessment applies to a director’s competence and experience. The committee highlights that, as disclosed by APRA in its first annual performance test in 2021, Mr Crumlin was the chair of the worst performing superannuation fund in Australia at that time, Maritime Super.

2.149The committee considers that it is an unsatisfactory arrangement whereby superannuation funds are not held to the same governance standards as many of the companies in which they invest their members’ funds. The effective administration of these funds is vital to the retirement incomes of millions of Australians and to delivering the necessary long-term capital required to build Australia’s economy. Given this, the committee considers that superannuation funds could, to the extent that they are relevant, have similar governance arrangements to the Corporate Governance Principles and Recommendations issued by the ASX Corporate Governance Council.

2.150The committee recommends that a requirement be introduced for superannuation trustee boards to have a majority of independent directors, and an independent Chair.

2.151The committee recommends that director competency rules be introduced, which would mandate, at a minimum, relevant experience requirements that would apply to the chair of a superannuation trustee board.

2.152The committee recommends that superannuation funds be required to maintain and make public a skills matrix for the purposes of conducting the Fit and Proper process for the appointment of directors.

APRA’s role in relation to trustee conflicts of interest

2.153Australians rightly expect that their retirement savings are managed free from any conflicts of interest. However, as considered in this report, directors of some superannuation trustee boards may have conflicts of interest that undermine their ability to act in the best financial interest of fund members.

2.154Currently, APRA has powers under the SIS Act to commence court proceedings which, if successful, would disqualify a person from being a superannuation trustee. Additionally, when the FAR commences for superannuation trustees APRA will have further powers to take administrative action in situations where persons in regulated entities are found to have breached their accountability obligations.

2.155Nonetheless, the committee believes that when directors of superannuation trustee boards are assessed to have material conflicts of interest, APRA should have clear powers to expeditiously remove those trustees from their positions.

2.156The committee recommends that the Australian Prudential Regulation Authority (APRA) be empowered with an adjudicable pathway to remove a trustee where an assessment is made that a material conflict of interest exists.

Mandatory reporting by APRA on BFID activities

2.157The committee is concerned there is a lack of transparency around superannuation fund Best Financial Interest Duty (BFID) frameworks, particularly how BFID assessments, audit processes and outcomes are determined. It seems to the committee that what clarity there is in relation to compliance with BFID is only provided when APRA takes regulatory action.

2.158Whilst the 2021 reforms reversed the burden of proof in civil litigation against the trustee, evidence of fund decision making is not publicised or reported to APRA.

2.159Although some funds publish details of their expenditure on activities such as subscription fees for associations/organisations, marketing/advertising, events, advice and partnership, the BFID considerations are not always evident.

2.160The committee believes that mandatory reporting to APRA of super fund BFID processes should be introduced to increase the information available to APRA, supporting its role providing independent oversight of the application of the standards.

2.161Further, the committee believes that APRA should publish fund BFID reporting to enhance transparency of fund decision making.

2.162The committee observes that the new retirement reporting framework on retirement outcomes commencing in 2027 could encompass BFID reporting.

2.163The committee recommends the government introduce new mandatory reporting requirements on the Australian Prudential Regulation Authority (APRA) to report on Best Financial Interest Duty (BFID) decisions of super funds, to align with existing APRA standards.

Capital requirements, related party payments, and trust deed amendments

2.164In amending their trust deeds and setting up risk reserves following passage of the Financial Sector Reform (Hayne Royal Commission Response) Bill 2020, the committee is concerned that superannuation fund trustees are confusing their own personal interests with those of their members. The committee finds this especially disturbing given that these entities have a legal duty to exercise their powers, and perform their duties, in the best financial interests of their beneficiaries.

2.165The committee considers that it is inappropriate for superannuation fund members to fund trustee risk reserves to pay for fines and penalties incurred by trustees who act inappropriately—especially when they, and their related organisations, generally have access to significant resources which could be drawn upon instead of members’ funds. These arrangements have the potential to have a material negative impact on members’ retirement savings if—or, more likely, when—the risk reserve is called upon due to trustee misconduct.

2.166The committee also considers that by appearing as a friend of the court—and facilitating trust deed amendments permitting the raising of risk reserves to pay for trustee misconduct—the prudential regulator, APRA, has not acted in the best interests of superannuation fund members.

2.167The committee is concerned that fund members are now paying higher fees as a result of these trust deed amendments and that this outcome does not align with the original intent of the bill. As such, the committee considers that all funds, including profit‑for‑member funds, such as Cbus and AustralianSuper, should maintain access to separate funding to meet the various costs to which they may be liable, including trustee penalties and compensation payments. Members should never be liable for these penalties and payments—directly or indirectly.

2.168The committee is also alarmed with figures showing that hundreds of millions of dollars of superannuation members’ savings are being spent on marketing and sponsorship, and that millions are being provided to related parties—including unions and employer sponsoring organisations. Although the committee cautiously welcomes APRA’s 'intensified supervision approach' to fund expenditure announced in October last year, it will continue to observe industry developments and regulatory actions closely.

2.169The committee recommends that the government introduce legislation which would require all superannuation funds to maintain adequate funding, raised by the shareholders separate from members' assets, to meet the various costs to which they may be liable, including fines for trustee misconduct and compensation payments resulting from misadministration. This funding should not be provided for, directly or indirectly, by members' funds and must come from the shareholders.

Insurance standards

2.170The committee finds that there is clear evidence that there are failings within the superannuation industry around the payment of insurance claims to members. This is highly concerning, as fund members making these claims are often suffering from poor health, significant stress and vulnerability, with the added stress of delayed claims processing only adding to this distress.

2.171The committee was very concerned by the recent commencement of legal action by ASIC against Cbus Super for delays in payment of claims to members. This action exemplifies the problems of insurance within the superannuation industry and the committee will continue to follow this case with interest.

2.172Cbus Super’s lack of cooperation with the committee in providing it with information asked for in questions on notice, in particular its risk and control matrix, was also disappointing. The committee’s investigations into this matter have been frustrated by this refusal and it will continue to pursue them through various channels.

2.173While the committee was pleased to see that Cbus Super has commenced a compensation scheme for members that were affected by the delays in claims processing, it remains concerned that this matter was allowed to reach such a dire state that ASIC was required to commence legal proceedings. The committee will continue to monitor this space and awaits the findings of the Federal Court in this matter.

2.174The committee remains concerned, however, that there seemed to be no clear answer as to where the funds to pay any fines which could be issued at the end of the ASIC court case against Cbus would be paid from. The fact that such fines could be paid out of money supplied by members of the fund, rather than from the trustees themselves, is a serious flaw in the superannuation system and should be fixed immediately.

2.175Adding to the committee’s concerns has been the recently published news about Rest Super’s charging of members for insurance they had opted out of. It is clear from the information gathered throughout this inquiry that there is significant need for reform of insurance in superannuation.

2.176The committee is cautiously optimistic that the mandatory service standards to be developed for the superannuation industry, as announced by Treasurer Jim Chalmers on 28January 2025, will go some way to addressing the concerns raised in this inquiry.

2.177The committee strongly supports the inclusion of consumer advocates, regulators and industry stakeholders in the development of the standards to ensure they are appropriately targeted. The committee hopes the standards will be developed in an expedient fashion.

2.178The committee recommends that the government work in an expedient fashion to develop mandatory insurance service standards for superannuation funds. These standards should be developed in consultation with consumer advocates, regulators and industry stakeholders.

Senator Andrew Bragg

Chair

Liberal Senator for New South Wales

Footnotes

[1]Note, this figure refers to the total value of assets in superannuation funds regulated by the Australian Prudential Regulation Authority (APRA). See, APRA, ‘APRA releases superannuation statistics for September 2024’, Media release, 27 November 2024.

[2]Ms Misha Schubert, Chief Executive Officer, Super Members Council, Committee Hansard, 14 November 2024, p. 2.

[3]See, Association of Superannuation Funds of Australia (ASFA), The Australian superannuation industry, September 2022, p. 13.

[4]See, ASFA, The Australian superannuation industry, September 2022, p. 13.

[5]See, ASFA, The Australian superannuation industry, September 2022, p. 13.

[6]Superannuation Industry (Supervision) Act 1993, s. 10.

[7]APRA, Prudential Practice Guide - SPG 510 – Governance, https://www.apra.gov.au/prudential-practice-guide-spg-510-%E2%80%93-governance, n.d. (accessed 6 February 2024).

[8]APRA, Prudential Practice Guide - SPG 510 – Governance, https://www.apra.gov.au/prudential-practice-guide-spg-510-%E2%80%93-governance, n.d. (accessed 6 February 2024).

[9]Jin Sug Yang, Anna Bedford and Martin Bugeja, ‘Director expertise and co-option in industry superannuation funds?’, Accounting & Finance, vol 63, no. 1, 2023, pp. 1249–1283.

[10]Australian Government, Super System Review Final Report: Part One—Overview and Recommendations, June 2010, p. 12.

[11]Australian Government, Super System Review Final Report: Part One—Overview and Recommendations, June 2010, p. 12.

[12]Australian Government, Super System Review Final Report: Part Two—Recommendation Packages, June2010, p. 55.

[13]Australian Government, Super System Review Final Report: Part Two—Recommendation Packages, June2010, p. 56.

[14]Australian Government, Financial System Inquiry Final Report, November 2014, p. 133.

[15]Australian Government, Improving Australia’s financial system: Government response to the Financial System Inquiry, October 2015, p. 14.

[16]Australian Government, Explanatory Memorandum: Superannuation Legislation Amendment (Trustee Governance) Bill 2015, September 2015, p. 3.

[17]Senator Sam Dastyari, Senate Hansard, 25 November 2025, p. 8888.

[18]Senator Sam Dastyari, Senate Hansard, 25 November 2025, p. 8890.

[19]For further information on the bill, see: Superannuation Legislation Amendment (Trustee Governance) Bill 2015 (accessed 3 February 2025).

[20]Australian Government, Superannuation Laws Amendment (Strengthening Trustee Arrangements) Bill 2017, September 2017, p. 7.

[21]See, Senator Sam Dastyari, Senate Hansard, 16 November 2017, p. 8671.

[22]See, Jin Sug Yang, Anna Bedford and Martin Bugeja, ‘Director expertise and co-option in industry superannuation funds?’, Accounting & Finance, vol 63, no. 1, 2023, pp. 1249–1283.

[23]Australian Institute of Company Directors, Reviews of super fund governance bring insights for all directors, 13 June 2018 (accessed 12 February 2025).

[24]Australian Institute of Company Directors, Reviews of super fund governance bring insights for all directors, 13 June 2018 (accessed 12 February 2025).

[25]Australian Institute of Company Directors, Reviews of super fund governance bring insights for all directors, 13 June 2018 (accessed 12 February 2025).

[26]Productivity Commission as cited in Australian Institute of Company Directors, Reviews of super fund governance bring insights for all directors, 13 June 2018 (accessed 12 February 2025).

[27]Menzies Research Centre, Submission 22, p. 5.

[28]Menzies Research Centre, Submission 22, p. 5.

[29]The Hon Wayne Swan, Chair, Cbus Super, Committee Hansard, 29 November 2024, p. 1.

[30]The Hon Wayne Swan, Chair, Cbus Super, Committee Hansard, 29 November 2024, p. 4.

[31]The Hon Wayne Swan, Chair, Cbus Super, Committee Hansard, 29 November 2024, p. 8.

[32]CA ANZ and CPA Australia, Submission 11, p. 4.

[33]CA ANZ and CPA Australia, Submission 11, p. 1.

[34]APRA, Prudential standard: SPS 520 Fit and Proper, https://handbook.apra.gov.au/standard/sps-520 30 June 2024 (accessed 4 February 2024).

[35]See, APRA, Prudential standard: SPS 520 Fit and Proper, https://handbook.apra.gov.au/standard/sps-520, 30 June 2024 (accessed 4 February 2024).

[36]APRA, Prudential standard: SPS 520 Fit and Proper, https://handbook.apra.gov.au/standard/sps-520, 30 June 2024 (accessed 4 February 2024).

[37]APRA, Prudential practice guide: SPG 520 Fit and Proper, https://handbook.apra.gov.au/standard/sps-520 30 June 2024 (accessed 4 February 2024).

[38]Super Members Council, answers to questions on notice, Document no. 16, received 17 January 2025.

[39]See, for example, APRA, ‘APRA takes action against IOOF for failing to act in best interests of superannuation members’, Media release, 6 December 2018; APRA, ‘APRA seeks disqualification of First Super co-chair Michael O’Connor’, Media release, 6 September 2024.

[40]Ms Carmen Beverley-Smith, Executive Director, Life and Private Health Insurance and Superannuation, APRA, Committee Hansard, 14 November 2024, p. 35.

[41]Australian Government, APRA Capability Review, June 2019, p. 93.

[42]Australian Government, Government Response to the APRA Capability Review Report, July 2019, p. 2.

[43]APRA, FAR implementation for insurance and superannuation entities, https://www.apra.gov.au/far-implementation-for-insurance-and-superannuation-entities, n.d. (accessed 7 February 2025).

[44]APRA, Financial Accountability Regime: Information for accountable entities, July 2024, p. 23.

[45]See, APRA, Financial Accountability Regime: Accountability statement guidance and template, July2024, p. 1.

[46]See, APRA, Financial Accountability Regime: Accountability statement guidance and template, July 2024, p. 7.

[47]APRA, Prudential Practice Guide, HPG 510 – Governance, February 2018, p. 11, HPG%20510%20Governance%20for%20PHIs_0.pdf.

[48]See, Joanna Mather, ‘Superannuation fund boards game the rules: APRA’, Australian Financial Review, 17 May 2018.

[49]APRA, Letter: Board Governance Thematic Review, May 2018, https://www.apra.gov.au/sites/default/files/BGTR_letter%2520to%2520industry_20180516.pdf.

[50]Cbus Super, ‘A message to our members: From CEO Kristian Fok regarding recent media coverage’, https://www.cbussuper.com.au/about-us/news/cbus-news/message-to-our-members#:~:text=Cbus%20is%20one%20of%20Australia's,on%20behalf%20of%20920%2C000%20members*, 23 July 2024 (accessed 6 February 2025).

[51]Professor Graeme Samuel AC, Independent privacy governance review of Cbus: Final report, n.d., pp. 14–16.

[52]Professor Graeme Samuel AC, Independent privacy governance review of Cbus: Final report, n.d., pp. 14–16

[53]Cbus Super, answers to questions on notice, Document no. 11, received 17 January 2025.

[54]Cbus Super, Our Board, https://www.cbussuper.com.au/about-us/how-were-run/board, n.d. (accessed 6 February 2025).

[55]Dr John Edwards, Chair, Board Risk Committee, Cbus Super, Committee Hansard, 29 November 2024, p. 1.

[56]ASX Corporate Governance Council, Corporate Governance Principles and Recommendations, 4th Ed. (February 2019), p. 13. https://www.asx.com.au/content/dam/asx/about/corporate-governance-council/cgc-principles-and-recommendations-fourth-edn.pdf.

[57]APRA, Prudential Standard CPS 510 Governance, July 2019, p. 9, https://www.apra.gov.au/sites/default/files/draft_prudential_standard_cps_510_governance_march_2019_v1_0.pdf (accessed 12 February 2025).

[58]APRA, Prudential Standard CPS 510 Governance, July 2019, p. 24, https://www.apra.gov.au/sites/default/files/draft_prudential_standard_cps_510_governance_march_2019_v1_0.pdf (accessed 12 February 2025).

[59]See, Hannah Wootton, ‘Former ACCC tsar Samuel pushes Cbus for more independent directors’, Australian Financial Review, 19 August 2024.

[60]Cbus Super, 2024 annual report, September 2024, p. 46.

[61]Cbus Super, 2024 annual report, September 2024, p. 46.

[62]Deloitte Touche Tohmatsu Limited (Deloitte), Independent Review United Super Pty Ltd as trustee for the Construction and Building Unions Superannuation Fund, November 2024, p. 4.

[63]Deloitte, Independent Review United Super Pty Ltd as trustee for the Construction and Building Unions Superannuation Fund, November 2024, p. 5.

[64]Deloitte, Independent Review United Super Pty Ltd as trustee for the Construction and Building Unions Superannuation Fund, November 2024, p. 41.

[65]Cbus Super, answers to question on notice, Document no. 11, p. 3 (received 17 January 2025).

[66]Mr Peter Kohlhagen, General Manager APRA, Committee Hansard, 14 November 2024, p. 35.

[67]Ms Lucinda McCann, General Counsel, APRA, Committee Hansard, 14 November 2024, p. 35.

[68]The Hon Wayne Swan, Chair, Cbus Super, Committee Hansard, 29 November 2024, p. 2.

[69]Cbus Super, answers to question on notice, Document no. 11, p. 3 (received 17 January 2025).

[70]Dr John Edwards, Chair, Board Risk Committee, Cbus Super, Committee Hansard, 29 November 2024, p. 3.

[71]The Hon Wayne Swan, Chair, Cbus Super, Committee Hansard, 29 November 2024, p. 4.

[72]The Treasury, Your Future, Your Super Review: Summary of Issues, April 2023, p. 17, https://treasury.gov.au/sites/default/files/2023-04/c2022-313936-yfys-review.pdf (accessed 4 February 2025).

[73]Ms Pai, Treasury, Committee Hansard, 13 December 2024, p. 13.

[74]Prudential Standard SPS 515, Strategic Planning and Member Outcomes (SPS 515), https://www.legislation.gov.au/F2024L00940/latest/text

[75]Australian Prudential Regulation Authority, ‘APRA strengthens core prudential standard to support outcomes for members in super 2024’, Media Release, Jully 2024, https://www.apra.gov.au/news-and-publications/apra-strengthens-core-prudential-standard-to-support-outcomes-for-members; Ms Pai, Treasury, Committee Hansard, 13 December 2024, p. 13.

[76]APRA, ‘APRA accepts court enforceable undertaking from Cbus and launches investigation’, Media release, 11 February 2025.

[77]APRA, ‘APRA accepts court enforceable undertaking from Cbus and launches investigation’, Media release, 11 February 2025.

[78]APRA, media release, ‘APRA seeks disqualification of First Super co-chair Michael O’Connor’, 6 September 2024, https://www.apra.gov.au/news-and-publications/apra-seeks-disqualification-of-first-super-co-chair-michael-o%E2%80%99connor.

[79]APRA, media release, ‘APRA seeks disqualification of First Super co-chair Michael O’Connor’, 6 September 2024, https://www.apra.gov.au/news-and-publications/apra-seeks-disqualification-of-first-super-co-chair-michael-o%E2%80%99connor.

[80]Sumeyya Ilanbey, Sydney Morning Herald, ‘Union boss denies misusing position as super fund board director,’ 7 February 2025, https://www.smh.com.au/business/banking-and-finance/union-boss-denies-misusing-position-as-super-fund-board-director-20250206-p5la6r.html.

[81]APRA, Letter to RSE licensees: Implementing Your Future, Your Super reforms, July 2021, https://handbook.apra.gov.au/letter/516/letter-rse-licensees-implementation-your-future-your-super-reforms#fragment-119363

[82]Revised Explanatory Memorandum to the Treasury Laws Amendment (Your Future, Your Super) Bill 2021, https://parlinfo.aph.gov.au/parlInfo/download/legislation/ems/r6672_ems_a090cd8d-d5a1-4c47-b6ea-cdac26c828b6/upload_pdf/JC002674_Revised%20Explanatory%20Memorandum.pdf;fileType=application%2Fpdf - search=%22legislation/ems/r6672_ems_a090cd8d-d5a1-4c47-b6ea-cdac26c828b6%22 p. 46, https://www.aph.gov.au/Parliamentary_Business/Bills_Legislation/Bills_Search_Results/Result?bId=r6672

[83]Ms Pai, Treasury, Committee Hansard, 13 December 2024, p. 13.

[84]The Treasury, Your Future, Your Super Review: Summary of Issues, April 2023, p. 18. https://treasury.gov.au/sites/default/files/2023-04/c2022-313936-yfys-review.pdf

[85]Ms Pai, Treasury, Committee Hansard, 13 December 2024, p. 13.

[86]Ms Pai, Treasury, Proof Committee Hansard, 13 December 2024, pp. 13-14.

[87]Deloitte, Independent Review, The Best Financial Interests Duty: Findings and Recommendations, pp. 6-7.

[88]Ms Pai, Treasury, Committee Hansard, 13 December 2024, pp. 13-14; CBUS, Question on notice, The Hon Mr Wayne Swan 002, [p. 9]; Cbus Super, Statement regarding Deloitte’s independent review reporthttps://www.cbussuper.com.au/about-us/news/media-release/statement-regarding-deloitte-independent-review (accessed 5 February 2025).

[89]Deloitte, Independent Review, The Best Financial Interests Duty: Findings and Recommendations, pp. 6-7.

[90]Cbus, Statement regarding Deloitte’s independent review report https://www.cbussuper.com.au/about-us/news/media-release/statement-regarding-deloitte-independent-review

[91]Cbus, Statement regarding Deloitte’s independent review report https://www.cbussuper.com.au/about-us/news/media-release/statement-regarding-deloitte-independent-review

[92]CBUS Super - 001: Answers to questions on notice from Wayne Swan asked by Senator Andrew Bragg at a public hearing on 29 November 2024, (received 13 December 2024), p. 5. https://www.aph.gov.au/Parliamentary_Business/Committees/Senate/Economics/RetirementSystem2024/Additional_Documents?docType=Answer%20to%20Question%20on%20Notice

[93]Mr Swan, Cbus, Committee Hansard, 29 November 2024, p. 10.

[94]Ms Pai, Treasury, Proof Committee Hansard, 13 December 2024, p. 14.

[95]Ms Pai, Treasury, Proof Committee Hansard, 13 December 2024, p. 14.

[96]CBUS Super - 004: Answers to written questions on notice asked by Senator Andrew Bragg to Wayne Swan on 20 December 2024. (received 17 January 2025); https://www.aph.gov.au/Parliamentary_Business/Committees/Senate/Economics/RetirementSystem2024/Additional_Documents?docType=Answer%20to%20Question%20on%20Notice

[97]Cbus, Additional details about expenses for the year ended 30 June 2024, https://www.cbussuper.com.au/content/dam/cbus/files/governance/reporting/amm-fy24-detailed-website-disclosure.pdf.

[98]Investment Magazine, Funds race to court to amend trust deeds, 10February 2022, https://www.investmentmagazine.com.au/2022/02/funds-race-to-court-to-amend-trust-deeds/ (accessed 5 February 2025). For further information on the bill, please see: https://www.aph.gov.au/Parliamentary_Business/Bills_Legislation/Bills_Search_Results/Result?bId=r6630

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[122]APRA, Submission 29, p. 3.

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[125]CALI, Submission 38.1, p. 9.

[126]CALI, Submission 38.1, p. 9.

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