Pension Fund Governance

Pension Fund Governance

A Global Perspective on Financial Regulation

Edited by John Evans, Michael Orszag and John Piggott

The academic literature on pension governance is sparse and this book will fill some important gaps by bringing together original contributions from around the world on subjects related to the area. The book initially lays out the main frameworks for pension fund governance and then goes on to examine global governance practice and experience and country studies on pension funds in the United States and Australia. The final section of this in-depth study discusses the role of government guarantees.

Chapter 4: Conflicted Super Structures: Are Australian Investors Being Short-changed?

Anthony Asher

Subjects: economics and finance, financial economics and regulation, welfare economics


Anthony Asher* Are members of superannuation (pension) funds in Australia being shortchanged? Different types of superannuation fund do charge significantly different fees. Some of the difference clearly arises from the quality and scope of the service offered, but there are other, less innocent, explanations for the high level of fees. Of particular concern are the conflicts of interest in some organizational structures. The first section of this chapter identifies the various types of fund. The second describes the main kinds of regulatory protection provided to members, some of which give rise to additional expenses. The third section examines the role of market or regulatory failures in explaining the apparently excessive level of charges of some funds. The fourth section looks at the functions performed by fund trustees, and identifies potential conflicts of interest as an alternative explanation of additional charges. The fifth section looks at the charges associated with the different types of fund and identifies the main drivers of expense. The final section suggests some topics for additional research and addresses some policy questions. 1. TYPES OF Superannuation FUND Australian superannuation funds are classified in a variety of ways in legislation and in the industry statistics published by the Australian Prudential Regulation Authority (APRA).1 There are inconsistencies in the definitions depending on the purpose for which they are used, but the main classifications are summarized in Table 4.1. In this chapter, we are concerned only with complying funds.2 Complying funds qualify for favourable tax treatment of investment income,...

You are not authenticated to view the full text of this chapter or article.

Elgaronline requires a subscription or purchase to access the full text of books or journals. Please login through your library system or with your personal username and password on the homepage.

Non-subscribers can freely search the site, view abstracts/ extracts and download selected front matter and introductory chapters for personal use.

Your library may not have purchased all subject areas. If you are authenticated and think you should have access to this title, please contact your librarian.

Further information