Expert calls for greater transparency in super funds

A Deakin University accounting expert is supporting recent calls by CPA Australia for an overhaul of Australian superannuation fund reporting, and is using the situation facing the fund of which he is a member to drive home the point.

Professor Graeme Wines is a member of UniSuper, the superannuation fund for Australian universities, which recently advised members of a potential shortfall in its defined benefit fund.

"But I am incensed that members are not receiving the necessary information to assess the extent of the potential shortfall," Professor Wines said.

"The fund tells us it has conducted actuarial assessments of the extent of the potential shortfall, but without the financial statement members and their financial advisers don't have full information to assess this for themselves."

Professor Wines supports recent comments by CPA Australiapointing to a lack of transparency about costs and underlying investments of super funds and calling for reporting to be of the same standard as for listed entities.

"Next to the house, the super fund is possibly the second largest or possibly the largest asset people have.

"Super fund members are entitled to the same level of financial information about their asset as shareholders in listed companies, yet they are not receiving it."

Professor Wines believes members should receive a full set of financial statements prepared by their super fund in accordance with Australian accounting standards.

"In this way, members will receive important information on, for example, fund cash flows, revenues, costs, investments, trustee and executive remuneration, management fees paid to advisers and related party transactions," he said.

Professor Wines stated that a serious deficiency in current super fund reporting was that information on declines in the value of investments was not required yet for companies must be disclosed under current accounting standards.

"This information would of particular relevance to UniSuper members," he said.

"Australia has been at the forefront of developing a comprehensive set of accounting standards designed to provide relevant and reliable financial reporting, but superannuation funds have slipped through the gaps.

"It is now time for this serious gap to be plugged.

"This is especially the case with increased compulsory superannuation contributions, increasing numbers of superannuation fund members and the ageing population."