New Policy to Force Disclosure of Fund Manager Pay

Industry Funds Management has announced a policy that would force fund managers to fully disclose how much they receive in exchange of their work to invest retirement savings of members.

The policy is part of the proposal to implement tougher governance rules.

A 2010 Cooper paper showed that retail funds are likely to pay more for related-party transactions. Fund managers can earn between an annual $500,000 to millions of dollars. The pay, however, is not revealed and remains a closely guarded secret.

Under the new proposal, fund managers would have to disclose how much they get. The 2010 Cooper review has revealed that the super industry clearly lacked systemic transparency.

According to Industry Funds Management chairman Steve Bracks, the move is to ensure that the superannuation industry would have more accountability to the public.

Bracks added that if implemented, the policy would cover all institutions in the superannuation industry.

The Industry Funds Management chairman said uniform disclosure standards should be legislated to cover everything in the super industry, including material service providers and investment managers.

Early 2012, ‘for-proift’ retail funds have also come up with their own standards. The policy included publication of what senior executives and directors receive.

The Australian Prudential Regulation Authority is expected to finalize its new prudential standards for the superannuation industry.