Most people see that as being a fairly hefty chunk of their hard-earned cash.
And if events play out the way they should, this amount will eventually constitute 12 per cent of an individual’s wages.
It stands to reason that people will demand those charged with looking after these savings to protect and invest them in the most prudent possible manner.
Naturally, there are no guarantees in life that desired outcomes will be achieved, but perhaps the closest we can get to making sure this money is properly managed is to put the best possible procedures in place to do so.
So it came as quite a shock when opposition treasury spokesperson Chris Bowen declared at a recent industry conference that Labor would not be supporting the Financial System Inquiry recommendation that major super funds – specifically industry funds – be run by a board of independent directors in place of the current representative boards.
It is surely recognised that the make-up of the board of directors of the largest and most successful organisations, not only in Australia but worldwide, is something our super funds should emulate.
That’s not to say the current representative boards have not done a good job to date, but there comes a time when the playing field has shifted so much it dictates that things have to change.
In the world of retirement savings, this shift has been the amount of money now in the system, which at the end of June, according to Australian Prudential Regulation Authority statistics, was $2 trillion.
To use a sporting analogy, Bowen’s and Labor’s stance on this matter is the equivalent to an amateur club joining a professional competition still clinging to its amateur-based administration, coach and training methods in the hope it can produce the results needed at the higher level.
We know this just won’t work.
It’s time for all people charged with the responsibility of the governance of super funds to acknowledge they are now playing A grade.
So they need to ensure the processes and procedures involved in running these organisations match the new situation, so Australians can get the results they demand and deserve.
Darin Tyson-Chan is the publisher and editor of Self Managed Super
