The Turnbull government's plan to impose independent directors on the boards of industry superannuation funds appears to be dead in the water.
Independent senators Glenn Lazarus, Jacqui Lambie, John Madigan and Nick Xenophon - along with the Labor and the Greens - will vote against legislation requiring the boards to have at least a third of their directors to be independent of trade unions and employers.
"I sort of lean towards that if it ain't broken, don't fix it," Senator Lazarus told reporters in Canberra on Wednesday.
Senator Madigan agreed, saying industry funds have been delivering as good or better returns than their retail competitors.
"Ultimately, this is about people getting the best return when they retire," he said.
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Senator Madigan believes the government is targeting the wrong problem when it should be chasing financial advisers that offer poor advice.
Greens senator Peter Whish-Wilson accused the government of making an ideological attack on industry funds and the union movement.
The government needs six of the eight crossbench votes to have its legislation clear the Senate against Labor and Greens opposition.
Industry Super Australia and the Australian Institute of Superannuation Trustees are commissioning a review of not-for-profit super funds.
It will be headed up by former central bank governor Bernie Fraser with the aim of producing a best practice governance code of conduct.
Mr Fraser is due to report back in April 2016.
"The code of conduct will preclude the need for legislation that would have dismantled the not-for-profit model of governance," Industry Super Australia boss David Whiteley said.
