AUSTRALIA - The first phase of Australia's overarching review of its superannuation system has been launched, with a new issue paper asking for feedback on the role the government should play in superannuation investments, including other topics.
In the first issue paper released by the Super System Review, also known as the Cooper Review, a panel raised questions about the governance of the country's superannuation funds.
The panel asked whether or not the government should be able to influence superannuation investments in infrastructure either by requiring some level of investment or providing incentives to do so.
The review also asked if the government should require a certain level of diversification, or if trustees should be given the freedom to decide a super fund's investment mix.
The paper also tackles the issue of leverage. It said: "Should superannuation funds be permitted to make investments that can result in investment losses beyond the original capital outlay - such as instalment receipts or contracts for difference - even if they do not involve borrowing?"
The role of trustees is also put under the microscope. The Review panel asked whether or not trustees should be members of the super fund they are representing.
In May, the government launched a review of the super funds that will analyse the governance, efficiency and structure of the systems, and appointed a panel to take the lead. The panel is led by Jeremy Cooper, the former deputy chairman of the Australian Securities and Investment Commission.
The review panel is accepting comment on these governance issues until October 16. The panel's final recommendations will be presented in early December.
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