Governance of Australian Pension Funds: An Insider View

Abstract

Pension (superannuation) funds perform a critical role in the provision of retirement income and have a significant impact on the supply and movement of funds in the world’s capital markets. In this context a key element is the scrutiny and oversight of pension assets is a robust governance framework. This investigation is empirical and qualitative based upon the perceptions of insiders of the governance framework of the APRA regulated industry. Superannuation in Australia is mandatory and auto enrolled and fund management is institutional divided into for profit and not for profit funds. The evidence confirms general agreement of a framework made up of external and internal governance mechanisms and concerns about issues such as; an objective, multilevel agency, member engagement and literacy. However, dichotomous and polarised views emerge on issues of principles basis of regulation and supervision, the market mechanism and internal process of trustee boards. The results provide input for policy development.

Keywords: Superannuation, Pension, Trustee, Governance, Corporate Governance, Australia, Regulation

JEL Classification: G23, G28, G30, G34, G38, K2, O56