ASIC reviews first round of super fund annual members’ meetings

ASIC today released findings about superannuation funds’ annual members’ meetings. The findings are based on a surveillance of the inaugural meetings held by trustees for a selection of superannuation funds between October 2020 to March 2021.

Annual members’ meetings are an opportunity for fund members to hear from the trustee’s board of directors and relevant executives and ask questions about important topics such as fund performance and operations. The Treasury Laws Amendment (Improving Accountability and Member Outcomes in Superannuation Measures No. 1) Act 2019 introduced the requirement for superannuation trustees to hold annual members’ meetings (refer Background).

ASIC’s surveillance looked at annual members’ meetings held by 24 superannuation funds and focused on whether the trustees:

  • met meeting attendance requirements by relevant directors, executive officers and service providers
  • published minutes of the meeting, including answers to members’ questions, on their funds’ websites, and
  • provided a reasonable opportunity for members to ask questions and answered those questions within one month

The funds reviewed were chosen to ensure a mix of industry, retail, corporate and public sector funds and collectively hold approximately $1trillion in funds under management (FUM). When selecting the funds, ASIC also considered the varying sizes of FUM and membership base.

ASIC’s surveillance did not identity significant failures by the funds to comply with the legislated obligations that were in the scope of the review. However, ASIC identified room for improvement in trustees’ communications to members and the ways in which they provide opportunities for members to ask questions at the meetings.

Based on the questions asked at the meetings, ASIC also noted that members were most interested in the following themes:

  • cybercrimes
  • environmental, social and governance considerations
  • fund performance and fees
  • impact of COVID-19, and
  • the superannuation guarantee

ASIC considers that annual members’ meetings are an important opportunity for trustees to engage with their members about key aspects of their fund and improve transparency. Based on the findings, ASIC has identified examples of good practice that could enhance member experience. Superannuation trustees are encouraged to consider these practices and take steps to improve their meeting arrangements as appropriate.

Good practices to improve transparency:

  • Provide clear information to members on how to submit questions prior to and during the meeting. Under the law, trustees are required to give members reasonable opportunities to ask questions at the annual members’ meeting. Providing information about the process involved, including through meeting materials and on the fund’s website, will help give members the confidence to ask questions.
  • Share Q&A with the broader membership of the fund. ASIC notes that it is helpful when trustees capture answers to all questions asked at the annual members’ meeting in a separate document and post it alongside the meeting minutes on the fund website. This gives all members, even if they did not attend the meeting, further insights into their fund.
  • Provide a video recording of the meeting. Making a video recording available, in addition to the minutes required to be provided, and notifying members of the ability to access this (e.g. through alternate communication channels such as e-newsletters or social media) increases the benefits of holding the meeting for the fund membership.

Background

Under the annual members’ meeting requirements in the Superannuation Industry (Supervision) Act 1993, superannuation trustees must hold a meeting of fund members for each year of income. The trustee is able to determine the platform through which the meeting is to be held – in person, electronically or a combination of both.

A notice of the meeting must be provided. It must include the time and location of the meeting, how it can be attended (including electronically) and the meeting agenda. Trustees may include other information with the notice. New regulations that prescribe information to include with the notice were released yesterday.

At the annual members’ meeting, trustees are required to give members reasonable opportunities to ask questions. They must publish minutes of the meeting on the fund website, including answers to any questions asked.

If they receive notice of the annual members’ meeting, the Chair of the trustee’s board of directors, a director, an executive officer as well as the fund auditor and actuary must attend the meeting, unless they have a reasonable excuse for not doing so. At the meeting, these representatives must answer all questions that are relevant under the law or provide their responses within one month if it is not practical to respond during the meeting.

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