This week, four independent crossbench senators came to the conclusion that there was no compelling evidence to pass new laws that would have fundamentally altered the character and perhaps, within time, the operating philosophy of Australia’s not-for-profit super funds.

The laws, championed by the big banks in their constant push to gain greater market share in super, would have imposed a mandatory requirement on industry super and other rival funds that at least a third of board appointments meet a (highly contentious) definition of “independent”, overseen by far-reaching powers for APRA to have a final veto over selection.

The end game appears to have been the complete dismantling of the ‘representative trustee’ board model which has allowed the representatives of employees and employers to have a place at the table and a say in decision-making.

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It did not escape the notice of the crossbenchers that funds using this more member-focused model of governance had outgunned the big bank retail funds in their net returns to funds members, on average, over at least 15 years.

Nor did it escape them that a number of these funds have already demonstrated they are perfectly capable of appointing independent directors to bring skills where needed. In fact, 24 not-for-profit industry super funds already have at least one independent board director.

Maths and hard evidence aside, the crossbenchers brought their own personal insights and instinctive skepticism to the final decision.

Senator John Madigan spoke of the lack of political appetite to deal with the injustices suffered by his Victorian constituents, retirees who had been left financially “ravaged” by the big banks’ poor financial advice, and managed investment schemes such as Great Southern and Timbercorp. Of all the complaints that come through his office door, he said industry super funds were not among them.

Tasmanian Senator Jacquie Lambie was staggered that super funds that were “blitzing the field” were under scrutiny, while no questions were being asked of poorer performing superannuation funds.

Queensland’s Glenn Lazarus was equally straightforward. “If it ain’t broke, don’t fix it,” said the Senator, especially when it’s the hard-earned cash of mums and dads at stake.

“We are talking about an issue that affects millions and millions of people,” he said, “and we’re talking about trillions and trillions of dollars and I for one want to get this right.”

And having been forced to think long and hard about how to get it right, Senators Madigan, Lazarus, Lambie and Nick Xenophon didn’t simply reject the government’s Bill and walk away. As Senator Madigan pointed out: “The biggest room in the house is the room for improvement.”

The crossbench senators insisted that industry super funds take a proactive approach to ensuring that not-for-profit funds continue to have strong governance in coming decades. A governance review to set up a code of conduct for the not-for-profit super sector, to be overseen by former Reserve Bank Governor Bernie Fraser, was agreed.

Industry super fund members can continue to be confident that their fund will continue to deliver gold standard returns and gold standard governance.

DISCLOSURE: The New Daily is owned by a group of industry superannuation funds.