The royal commission into the financial services sector announced by the government on Thursday will not delay the government's reform agenda for superannuation, Revenue and Financial Services Minister Kelly O'Dwyer says.
The reforms, which include requiring all super funds to have some independent directors on their boards, were "long overdue", Ms O'Dwyer told a superannuation conference in Sydney on Friday.
The government had a comprehensive set of "reforms that are squarely focused on protecting members' money and members' interests", Ms O'Dwyer said.
They involved increased transparency and accountability as well as stronger powers for the superannuation regulator, the Australian Prudential Regulation Authority, she said.
Another key reform was to require super funds to annually audit their MySuper investment options to "ensure they promote the financial interests of these members and make a public determination confirming this".
Not-for-profit funds, such as industry funds, have a far higher portion of their members in MySuper options than do their "for-profit" rivals, such as those run by the big banks and insurers.
"One of the greatest myths surrounding these changes has been the way some parts of the industry have asserted that somehow this means bank-owned super funds are not impacted," Ms O'Dwyer said.
"Let me be clear, all [super funds] that offer a MySuper product, and that includes all of the superannuation providers owned by the big banks, will be required to comply with this requirement."
Super funds are required to have their "default" investment options, the options for those who do not choose who manages their super, to be MySuper compliant, ensuring certain member protections.
Labor and industry funds have noted that the royal commission, which the government wants to start in February and run for 12 months, will consider if super funds are using members' retirement savings for "any purpose that does not meet community standards and expectations, or is otherwise not in the best interests of members".
Some in the Coalition are concerned that some industry funds use members' money to sponsor sports teams, for example.
Industry Super Australia chief executive David Whiteley said: "It's a competitive market and industry funds use mainstream marketing and advertising strategies, but what worries the bank-owned super funds is the effectiveness of these strategies.
"If the advertising has not been effective, the banks wouldn't mind," he said.
"If there was to be some suggestion that industry funds should not advertise in a competitive market then that would be restraint of trade."
???Ms O'Dwyer said in her speech that the entire financial services industry must be able to stand up to scrutiny.
"That is what Australians expect, and rightly so," Ms O'Dwyer said.
Ms O'Dwyer said the government would also push ahead in trying to get parliament to pass bills that would require super funds' boards to have at least one-third "independent" directors.
Industry funds have equal representation of employees (from unions) and the larger employers.
The Financial Services Council, whose membership includes those financial institutions, such as banks, require their super funds to have a majority of "independent" directors.
Michael Rice, an actuary and chief executive of superannuation research firm Rice Warner, said having one-third of boards' independent was "pretty benign" and some industry funds already had that structure.
"Independent directors can improve the collective skills of the board," he said.
However, Mr Whiteley said industry funds had boards that were particularly focused on members.
Industry funds, which have more than 5 million members, many on middle and lower incomes, have outperformed bank-owned funds, on average.
"What the government seems to be prepared to do is to dismantle the governance model of the best-performing sector in favour of the worst-performing sector," Mr Whiteley said.
The government's superannuation reform agenda includes allowing those workers who cannot choose who manages their super, because of industrial agreements, to be free to choose.
"I want to stress that each of these important reforms will apply equally to all retail, bank-owned, industry, corporate and public sector superannuation funds," Ms O'Dwyer said.
The story Royal commission won't delay super reforms: O'Dwyer first appeared on The Sydney Morning Herald.