Super Funds Under Scrutiny: A Call for Member Control
The recent controversies surrounding the Construction, Forestry and Maritime Employees Union (CFMEU) and its ties to figures like Mick Gatto have reignited debate about governance and accountability within Australia’s powerful superannuation funds. Specifically, questions are being raised about the influence of unions on fund boards and whether the interests of everyday members are truly being prioritized.
The Gatto Connection and CBUS
A series of meetings between union bosses, including Peter Marshall of the firefighters’ union and Earl Setches of the plumbers’ union, with Mick Gatto sparked a swift response from CFMEU administrator Mark Irving in October 2025. Irving issued a directive forbidding unauthorized contact with Gatto, citing concerns about potential wrongdoing and conflicts of interest. This followed an earlier incident where a CFMEU official, Zach Smith, arranged a secret meeting between a subordinate and Gatto, ultimately leading to Smith’s resignation.
The focus has now turned to CBUS, a major industry super fund and the default fund for many CFMEU members. Earl Setches, a plumbers’ union boss, sits on the CBUS property arm’s board as a “member director” appointed by a union governor. Following reports of the yacht meeting with Gatto, CBUS launched a “fit and proper person” assessment of Setches and Lucy Weber, a CFMEU representative on the board. Weber subsequently resigned after it was revealed she had failed to disclose a personal relationship with Smith.
Governance Concerns and Past Issues
These events are not isolated. In 2024, the federal government appointed Irving to administer the CFMEU’s Victorian branch following allegations of corruption and criminal infiltration. Irving initially sought to remove existing member directors from the CBUS board, but faced resistance. While a subsequent review by Deloitte deemed those directors “fit and proper,” it also highlighted gaps in governance structures and couldn’t definitively conclude whether directors consistently acted in members’ best financial interests, particularly regarding spending on CFMEU events.
CBUS isn’t alone in facing scrutiny. Other industry funds, including AustralianSuper and Hostplus, have also been identified as making payments to industrial bodies. This raises questions about the potential for conflicts of interest and the appropriate use of members’ funds.
The Case for Greater Member Control
The current structure of industry super funds, with equal representation for unions and employer groups, is increasingly being questioned. Critics argue that this model lacks sufficient independent oversight and accountability to members. Some advocate for granting superannuation members similar rights to investors in publicly listed companies, allowing them to vote on the appointment and removal of directors.
Currently, CBUS chairman Wayne Swan defended the existing model in 2024, arguing it contributed to the sector’s success. However, the recent controversies suggest a necessitate for greater transparency and a stronger focus on protecting the interests of fund members.
What’s at Stake: Trillions of Dollars
Industry super funds manage a multitrillion-dollar sector, making them significant players in the Australian economy. The funds were initially established with the support of the trade union movement, and building workers were the first to receive award-based superannuation in 1984, eventually leading to the creation of CBUS. However, the scale and complexity of these funds today necessitate a re-evaluation of governance structures.
Frequently Asked Questions
Q: What is a “fit and proper person” assessment?
A: It’s an evaluation conducted by a fund to determine if an individual meets the necessary standards of integrity, honesty, and competence to hold a directorial position.
Q: What role do unions play in super fund governance?
A: Unions typically have representation on the boards of industry super funds, reflecting their historical role in establishing these funds.
Q: Why is transparency important in superannuation?
A: Transparency ensures that members understand how their funds are being managed and that conflicts of interest are identified and addressed.
Q: What can members do if they are concerned about fund governance?
A: Members can raise their concerns with the fund directly, contact their union representative, or seek advice from a financial advisor.
Did you realize? The superannuation sector holds a significant portion of Australia’s national savings, making robust governance essential for the financial security of millions of Australians.
Pro Tip: Regularly review your superannuation fund’s performance and governance practices to ensure it aligns with your investment goals and values.
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