Shock dismissal of 50% of super panel members

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It’s been a hard week for the Fair Work Commission’s (FWC) expert superannuation panel, which just lost half of its four members after accusations of conflicts of interest.

Iain Ross, the president of the FWC, has announced his decision to dismiss Vicki Allen and Stephen Gibbs due to perceived conflicts of interest. A third member facing conflict of interest claims, Arthur Apted, was cleared and allowed to continue in his role.

The decision now leaves just Apted and panellist Tim Harcourt to carry out the review of the default super funds in workplaces.

The issue of conflict of interest was initially raised by the Financial Services Association (FSC) in a letter to the FWC, seeking the removal of the panellists.

In a statement about the results of his subsequent investigations, Ross said that he has become aware that panel member Allen is the director of the Motor Trades Association of Australia Superannuation Fund, which is an authorised MySuper product.

He felt there would or could be a conflict between her duties as director and her performance as a panel member – especially if she were to deal with applications from the MTAA Superannuation fund or the trustee of that fund.

“In my view it is likely that if expert panel member Allen continues to deal with [this] matter she will receive confidential or commercially sensitive information about funds or entities that are actual or potential competitors of the MTAA Superannuation Fund or the trustee of that fund,” Ross stated.

Disclosure statements requested from the four members have been published on the FWC website, and reveal that Allen also resigned as the director of Superannuation Administration Corporation (trading as Pillar Administration) on February 24, three days after a letter from Ross requesting further information about it.

In his decision to remove Gibbs from the panel, president Ross noted that he was made aware that Gibbs is the director of Australian Ethical Superannuation, a trustee of the Australian Ethical Retail Superannuation Fund (AER), which is a MySuper product.

Ross said in his view Gibbs would also have a conflict between his duties as director, and his performance as a panel member. He believed that as a panellist, Gibbs would be privy to confidential information from funds or entities that are potential competitors of the fund or trustees of AER Super.

The removal of the two panel members raises even more doubt about the FWC’s role in electing the default workplace superfunds, which has already been heavily criticised. 

The Corporate Super Specialist Alliance (CSSA) president Douglas Latto previously told Wealth Professional that the organisation had major concerns about the process and the FWC’s lack of experience.

“Our members, for example, are specialists in helping people select super funds and they spend years and years doing it,” he said. “I don’t see how the Fair Work Commission can walk in after a few months. It’s like getting your handyman to do your electrical work”.

The FSC also want the FWC out.

The Australian reported that chief executive John Brogden called the whole thing embarrassing.

“This has basically rendered the process impotent. We want the Fair Work Commission to be removed completely from the process of selecting super funds in awards,” he said.

SEE MORE:

MySuper red tape claim rejected by CSSA

Firm delves into property advice

ISN weighs into default super debate




 
 
  • SB on 11/03/2014 11:29:21 AM

    The horse bolted long ago.

  • Wondering out loud on 11/03/2014 9:31:07 PM

    Conflicted and sacked. Well done. How amazing that these people who were appointed to this panel and entrusted with this very onerous responsibility to ensure that Australians superannuation money is properly contributed and invested through mysuper funds that are properly formed and managed couldn't even see their own conflicted positions.
    It raises a very interesting point about the Trustees of a number of industry funds who ‘bang on about’ conflicted remuneration practices but seem very willing to have potentially conflicted trustee arrangements. Maybe Mr Wheatley would like to comment on this at some stage – perhaps soon.
    What is worse is that the Fair Work Commission (FWC) has been granted the right to conduct this review.
    If as a financial planner I wish to provide advice within the superannuation field I need to be appropriately qualified. I have not looked at the qualifications of the people responsible for this review and its recommendations, but the FWC doesn’t at first glance appear to be the right body to do this review. I certainly hope that there is the appropriate qualifications and experience in the panel members, and a panel of two at the moment, I believe is seriously short of quality and expertise for this sort of an operation.
    President Ross at least seems to be trying to ensure that the process is fair and transparent which in this industry has to be a first.

  • Adviser B on 17/03/2014 10:33:08 AM

    Let's be honest - it was a stacked body with the sole purpose of looking after their own self-interests, but operating under a name that made it seem legit - "Fair Work Commission" and given an important job that provided the opportunity to feather their own nests.
    It's far too common these days from both sides of politics - fake commissions and reviews with stacked members that are designed to ensure a certain pre-determined outcome whilst pretending to be legit, independent and fair.

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