SuperTalk Edition 16 by Australian Institute of Superannuation Trustees (AIST)

AIST Member Newsletter

Edition 16 â&#x20AC;&#x201C; December 2014

Indigenous Super reaching remote communities

CONTENTS

AIST Member Newsletter Edition 16 – December 2014 From the CEO 02 Super news 03 Cover Story – Indigenous super 11 Data & Tech - Thirst for data 14

5 minutes with Anne-Marie Corboy 15 5 Gen Ys in super 17 Snapshot: Fund Governance Symposium 2014 20 Ageing Australia 21 UniSuper’s call centre revamp 22 Ian Silk: Moving super from B+

24 Super Grads’ 10 year milestone 26 ASI 2014 29 AIST Awards 2014 30 Learnings from Harvard 31

Member news 32

EDITORIAL:

Editor: Janet de Silva 03 8677 3800, jdesilva@aist.asn.au

No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopied, recorded or otherwise without the permission of the publisher.

Staff Writer: Sarah Goodwin Graphic Design: Renae Tindill Cover Photo: Drum Atweme, a drumming group of young people from town camps in Alice Springs. © Steven Pam / Smartshots. facebook.com/aistbuzz twitter.com/@aistbuzz

DISCLAIMER: AIST does not necessarily recommend the products and services advertised in SuperTalk. All details were correct at the time of printing.

SUPERTALK - December 2014

From the

CEO

It’s been another busy year for everyone working in superannuation. An ever-changing and increasingly competitive landscape has created challenges for all areas of fund operations and highlighted the need to innovate and keep ahead of the game. Many of AIST’s 64 member funds are embracing these challenges by investing in new technology and launching new or enhanced services and products. Not-for-profit funds have led the field in the low-cost MySuper space, where they account for more than 90 per cent of savings under management. In addition to achieving another year of solid investments returns, many notfor-profit funds are reporting an increase in member engagement. Website visits are on the rise and there has been a strong uptake of online tools and intra-fund advice. Member-direct options are becoming more widespread and more members are attending educational seminars and tuning in to investment webinars. There has also been plenty of activity on the policy front. From the ongoing implementation of the Stronger Super reforms, the review of super fund governance, the Financial System Inquiry and the attacks on the Low Income Super Contribution (LISC), SG increases and FOFA – the pace has not slowed. AIST remains concerned about the Government’s decision to delay the planned SG increase to 12% and axe the LISC after 2017. We continue to engage

02 SUPERTALK - December 2014

with the Government and other key stakeholders about the need to address these adequacy and equity issues and improve the retirement outcome for all working Australians.

BIG YEAR FOR EDUCATION 2014 was also a big one in regards to education and events. AIST’s flagship educational offering – the Trustee Director Course – continues to go from strength to strength with more than 60 individuals now having completed one or two levels of the course and gained the prestigious nominal: GAIST. With more and more emphasis placed on the educational qualifications of trustee directors, the TDC fills a gap in the director training market and has very quickly become super’s answer to the company director course.

THE NOT-FOR-PROFIT COMMUNITY As host of one of the industry’s biggest events – the Conference of Major Super Funds – down to smaller boutique offerings - such as this year’s inaugural legal symposium - AIST prides itself on ensuring our events always provide delegates with plenty of food for thought and tangible learning outcomes. In addition to securing renowned speakers from all over the world, AIST events have long provided a platform for talented and emerging fund staff in our sector.

Tom Garcia Chief Executive Officer AIST

Often, it is these speakers who end up being the most relevant and memorable. The long history of collaboration and collective spirit among not-forprofit funds enriches every AIST event I’ve attended. Instead of trying to out-compete each other, trustees and fund staff relax in each other’s company and, more often than not, are happy to share information. In 2015 we are revamping our one-day event series to make these events even more interactive and ensure they continue to provide tangible outcomes, which can be implemented by your fund. CMSF also continues to evolve, with next year’s 25th birthday event offering a range of new technology tools set to enhance your learning and networking. On behalf of the AIST board and staff, I would like to thank you – a valued AIST member - for your ongoing support this year. We are fortunate to have a very active membership that provides invaluable input to all our activities in education, policy and events. We look forward to working with you again in 2015.

Leading representatives of the not-for-profit superannuation industry gathered for a night of celebration in late November for the AIST 2014 Awards for Excellence. The gala event at the RACV Club in Melbourne recognised key achievements of not-for-profit funds, with a total of ten awards and two scholarships announced. VicSuper took out the award for best annual report this year with judges commenting that “VicSuper acts and reports with integrity within an approved framework which ultimately strives to provide the best outcomes for its members.” AIST CEO Tom Garcia said that the awards recognise and demonstrate the hard work individuals and funds take to provide the best results for super fund members.

SUPER NEWS

AIST AWARDS RECOGNISE NOT-FOR-PROFIT DEDICATION

MC Tim Campbell and AIST President Angela Emslie sharing an on-stage laugh.

“This year’s winners have all shared a common theme – dedication to members’ best interests. It is this ethos that makes our sector truly worth celebrating,” said Mr Garcia.

AIST congratulates all of our Award winners: AWARD

WINNER

Super Business Development Award for Excellence

Neil Saxton, HESTA

Super Finance Award for Excellence

Finance team, Telstra Super

Super Member Services Award for Excellence

Member services team, Equip

Super Investment Professional Award for Excellence

Paul Kessell, Kinetic Super

Super Operations/Administration Award for Excellence

Sharnie Barabas, Australian Catholic Superannuation & Retirement Fund

Communication Award for Excellence – Annual Report

VicSuper

Communications campaign/project (funds under $5B FUM)

AMIST Super

Communications campaign/project (funds under $10B FUM)

Equip

Communications campaign/project (funds over $10B FUM)

HESTA

Platinum Communication Award

HESTA

Leader Development Scholarship – Fund Staff

Michelle Di Fabio, HOSTPLUS

Leader Development Scholarship – Trustee Director

Dr Rosemary Kelly, First State Super

GETTING THE LONG-TERM MESSAGE ACROSS Leading global pension expert, Keith Ambachtsheer, is encouraging Australian funds to adopt ‘integrated reporting’ to help them better articulate the value of their organisation to members. At a joint AIST and Australian Council of Super Investors (ACSI) briefing session held last month in Melbourne, Mr Ambachtsheer emphasised the importance of funds providing clear communication on member outcomes through integrated reporting. “The primary focus should be reporting what is happening

to members (particularly) on an age-related basis,” said Mr Ambachtsheer. Well known to many in the Australian super industry, Mr Ambachtsheer - a director emeritus of the Rotman International Centre for Pension Management (Canada) and the renowned author of three books on the pension fund industry – also emphasised the need for funds to measure success over the long term and not get caught up in short-term peer-to-peer performance ratings. “The case for long-termism is a

movement – it’s going global… the challenge is to communicate (this) to members,” he said.

ACSI CEO, Gordon Hagart, Liz Prescott (IIRC), Keith Ambachtsheer and AIST CEO, Tom Garcia at the briefing

SUPERTALK - December 2014

SUPER NEWS

MEDIA SUPER BREATHES NEW LIFE INTO ANNUAL REPORTING In a bid to move away from the traditional (read dull and boring!) annual report, Media Super has launched a 2014 Yearbook focusing on the stories and achievements of the industries and members which form the Media Super community: print, media, entertainment and arts. The Yearbook breathes new life into annual reporting, and the online version is a living hub that looks back at the events and stories of 2013/14. The creative platform has been exceptionally well received, with the fund reporting a ten-fold increase on website traffic from last year’s annual report. “We’re very deeply committed to, and involved with, the Media Super community,” said Joel Clapham, General Manager of Communications & Marketing. “Our history of over 27 years of being a key partner with associations, employers and staff, is something we’re proud of and

The interactive site works on various platforms

strengthening all the time. The Yearbook is a wonderful way for everyone to share in the stories and achievements of their fellow members, as well as gain insight into the developments the fund has introduced in the past year,” he said. While many organisations report that member engagement with annual reports is low, Mr Clapham said it was “time to step away from defeatist thinking and make a change.” “As an industry, we drop the buzz phrase of ‘member engagement’ every other day,” said Mr Clapham. “If annual reports aren’t striking a chord, then we

need to re-invent what an annual report is, and that’s exactly what we’ve done,” he said. Mr Clapham said Media Super members expected their fund to be creative and wanted an ongoing conversation about their lives now, as well as their retirement plans ‘one day’. “Every opportunity to reach out is another chance for us to say hello and strengthen that connection, ” he said.

See Media Super’s Yearbook online at www.yearbook.ms

ME BANK RAMPS UP GROWTH PLANS AS NEW TECHNOLOGY COMES ONLINE ME Bank has announced a 28 per cent growth in underlying net profit to $47.4 million for the 2013-14 Financial Year, plus the imminent completion of its technology transformation project. ME Bank CEO, Jamie McPhee, said “the financial result was a strong performance achieved while the Bank continues to invest significantly in the business and against the backdrop of a low credit growth environment. “Our recent investments are generating growth, building value for shareholders and giving customers a better banking experience, putting us in an excellent position to pursue accelerated growth in future years”. McPhee highlighted the Bank’s

04 SUPERTALK - December 2014

technology transformation project as a key enabler for growth. “In an industry increasingly reliant on technology, the completion of our transformation project in early 2015 means we’ll have a highly capable technical platform with which to compete against industry leaders in terms of the range and attractiveness of products and services.” Mr McPhee said the Bank had passed another milestone in July, deploying its new ‘system architecture’ which replaces the bulk of its old technology systems and sets it up to offer a host of new disruptive services in the near future. “Once the entire program is completed our energy can be put toward capitalising on the potential

ME Bank CEO, Jamie McPhee

the new systems bring, including tripling the Bank’s size by 2020,” said Mr McPhee. “We’re not encumbered by a host of legacy systems that can impinge on technology programs like this. This is an exciting moment in the Bank’s history.”

HESTA has announced the implementation of a restriction on thermal coal investments across all its investment options. Following the announcement of the restrictions, HESTA CEO Anne-Marie Corboy addressed the UN Climate Summit in New York, where she led a carbon-pricing push by 348 of the world’s biggest investors aimed at encouraging an additional $1 trillion a year in green investments. Under the new portfolio-wide restriction, HESTA will not invest in newly listed companies (from listing onwards) or make new investments in unlisted companies that derive more than 15% of revenue or net asset value from exploration, new or expanded production, or transportation of thermal coal. A more extensive exclusion applies to the Fund’s socially responsible

option (SRI), Eco Pool. While some other super funds have a restriction on thermal coal investments, it is typically limited to their SRI options. HESTA is the first major Australian super fund to apply a thermal coal restriction across all investment options. The fund believes new or expanded thermal coal assets face the highest risk of becoming stranded before the end of their useful life. “It is not prudent, nor in the long-term interest of members, to invest in the expansion of these assets,” Ms Corboy said She described the restriction as another step in the fund’s ongoing response to the increasing impact of climate change on its long-term investments. “The push to limit the impact of global warming requires economies

SUPER NEWS

HESTA TAKES NEW STANCE ON THERMAL COAL

HESTA CEO, Anne-Marie Corboy

to move to a lower-carbon intensive future and investors have an important role to play in this transition,” Ms Corboy said. “HESTA believes that further investment in developing new, or expanding existing, thermal coal reserves is inconsistent with this imperative to reduce carbon emissions.” The move builds on HESTA’s climate change policy which requires consideration of climate change issues in its investment processes.

KINETIC SUPER LAUNCHES INTRA-FUND ADVICE SERVICE Kinetic Super has launched an intra-fund service for members that will allow access to limited personal advice for insurance, investments and contributions in relation to their Kinetic Super account. The advice service – launched in September through Kinetic Super’s online newsletter and website – is available either face to face or over the phone with the cost covered by the general administration fee charged to members. Kinetic CEO, Megan Bolton said Kinetic Super has recorded strong interest in the service since it was launched, particularly at statement time, with referrals for the service increasing. “Our advice consultants are licenced under the AFSL of Industry Fund Services (IFS) and we hear a lot of the direct feedback,” said Ms Bolton, “The general response from members who have experienced the service has been extremely positive.” Kinetic Super has been

interested in providing an intra-fund advice service for several years and a number of different business models were explored. “We were intent on developing this service for our members for two main reasons,” said Ms Bolton. “We want to give our members a greater choice of advice options and seize the opportunity to use this service as a point of difference for our fund - we think we’ve accomplished that.” Kinetic Super members already enjoy a range of self-help online educational tools, website videos, general advice and workplace educational sessions. This new intra-fund advice service is an extension of that, where members can obtain more detailed, simple advice to help them make decisions about their Kinetic Super account. The new service will be a shared responsibility of two teams – one for phone-based consultations and the other for face-to-face interviews.

Kinetic Super CEO, Megan Bolton

Ms Bolton said that while some super funds are transitioning to fee-for-advice models for certain types of customers, Kinetic believe it is important for intra-fund advice to remain available to all members to encourage people to make active decisions about their accounts. Ms Bolton said that limited advice models should be simple, straightforward, easily accessible and understandable to the average Australian.

SUPERTALK - December 2014

SAV E T H E DAT E Australian Council of Superannuation Investors

ACSI ANNUAL CONFERENCE Tuesday 5 May 2015

Sheraton on the Park 161 Elizabeth Street, Sydney

F u r t h er d eta i l s to fo l l ow

COMING TO SYDNEY

www.acsi.org.au

Australia’s $650 billion not-forprofit superannuation sector has been warned against complacency in the face of a rapidly changing superannuation landscape. Speaking at AIST’s recent Fund Governance Symposium, Cath Bowtell, a former AGEST CEO and now chair of Industry Fund Services, said not-for-profit funds were facing challenges on a number of fronts including the cost of technology investment, a saturated market, the rise of selfmanaged super funds, changing labour markets and threats to current distribution networks. “All these things challenge the effectiveness of our organisations,”

Ms Bowtell said. “Business as usual is not an option.” Ms Bowtell said the technology spend of the major banks was a particular challenge for not-forprofit funds. “Big isn’t everything but it’s not nothing,” said Ms Bowtell. “We know the banks have spent billions on technology.” While Ms Bowtell predicted more not-for-profit funds would merge to gain the benefits of scale, she said mergers were not the answer for all funds. “It’s not a question of how big, it’s a question as to whether you have the growth and you can access scale.”

SUPER NEWS

NO ROOM FOR COMPLACENCY IN NOT-FOR-PROFIT SECTOR

Cath Bowtell had the audience thinking

Don’t miss Cath Bowtell speaking on governance issues at CMSF 2015. Register online at www.aist.asn.au/cmsf

NEW ONLINE COMMUNITY PROVIDES SUNSUPER WITH INVALUABLE MEMBER FEEDBACK Sunsuper has taken member engagement to a new level with the launch of a unique online member community ‘My2cents’ that has already attracted over 2500 members. The online hub allows members to provide feedback on everything from product development, communication and messaging, to investment choice and general sentiment. Chief Executive Officer Scott Hartley said that the community was helping Sunsuper gain a deeper understanding of the behaviors, needs and attitudes of members. “My2cents allows us to rapidly gather perspectives from members that can add real benefit to the customer service experience,” said Hartley. “It gives us the ability to collect real-time feedback from members that is proving invaluable in terms

Sunsuper staff monitor the new online hub

of solving operational issues and guiding business decisions.” While Sunsuper plans to use feedback from the community across all aspects of business, findings have already been used to help determine operating hours for the fund’s member advice centre and to look at the future design and user experience of the Sunsuper website. The fund also expects to see input on annual report design and insurance claims processes. Members provide their insights

through the online site where they can also take part in online surveys, activities and discussion forums – creating a virtual community of members.

The voice of the customer and members’ best interests are at the heart of everything we do SUPERTALK - December 2014

SUPER NEWS

FEMALE CHAIR NUMBERS HIT DOUBLE FIGURES WITH REI APPOINTMENT The recent appointment of Claire Higgins as the chair of REI Super takes the number of female chairs in the not-for-profit superannuation sector to more than 10. REI Super has announced the appointment of Claire Higgins as the incoming Independent Chair of Australia’s industry super fund for real estate and property professionals. Ms Higgins – who commenced the role as REI Super Chair in October – is a professional nonexecutive director and, among other positions, is currently the Chair of the Country Fire Authority (CFA) Victoria. CEO Mal Smith said fund members would be the beneficiaries of Ms Higgins’ extensive skills and strong background. “The Board is delighted that after a thorough search and a rigorous selection process, we have been able to secure the appointment of Claire Higgins to the

role of Chair. Claire has the required credentials and experience to lead the fund forward,” said Mr Smith. Ms Higgins welcomed the prospect of leading REI Super though its next phase. “I am excited to join such a highly respected fund and a great team of talented professionals. I look forward to working with the Board and staff of the fund to ensure the continuing success of REI Super,” Ms Higgins said. AIST Executive Manager, Leadership and Governance, Eva Scheerlinck said that the appointment of another female chair in the not-for-profit sector should be celebrated. “Gender diversity on boards is important, and it is pleasing to see that not only are the numbers of women on boards slowly increasing, but more women are being appointed as Chairs of those boards,” Ms Scheerlinck said. The appointment coincides with

New chair Claire Higgins

the retirement of former REI Super Independent Chair Bill Woolcock after more than 20 years’ service on the board of REI Super. “My time at REI Super has coincided with a period of significant growth of superannuation in Australia. In that time, we have continued to grow, innovate and develop our service to members,” said Mr Woolcock.

WIS AWARDS FOUR SCHOLARSHIPS IN NSW The NSW arm of the advocacy and networking group, Women in Super (WIS), has announced the winners of its fourth annual scholarship program. The program - now in its fourth year - provides four women with funding for further education to enhance their career development and help foster the appointment of more women to super fund boards. Proud winners included Camilla Love from Perennial Value Management, Emma Jonceski from Christian Super, Louise Micallef from First State Super and Lorraine Roberts from National Australia Bank. The women will be given the opportunity to attend the ‘Getting Started: Realising your Board Potential’ half day workshop

08 SUPERTALK - December 2014

Proud scholarship winners Lorraine Roberts, Camilla Love, Emma Jonceski and Louise Micallef

run by Women on Boards or the ‘Professional Skills’ two day workshop run by rogenSi. Christian Super’s Emma Jonceski said she has chosen to take part in the ‘Influencing Skills’ programme hoping the course will give her more confidence when pitching thoughts, opinions and ideas, and the skills to handle pushbacks and challenges along

the way. “I believe that skills such as learning how to deliver a compelling argument and how to get buy-in for my ideas will be incredibly helpful, not only in my current position, but throughout my career, “she said.

2015 scholarship applications open in May.

Research released at AIST’s recent thought-leadership series on mental health and superannuation has revealed a huge variation in the member suicide rate among funds. The research – released as part of the initial findings of a SuperFriend project entitled SuperMIND - showed that suicide rates among funds vary from as low as 2 per cent to as high as 15 per cent. Opening the luncheon series held in Melbourne and Sydney, AIST President Angela Emslie began by asking the more than 250 delegates in attendance to consider mental health issues in their fund’s strategy. “Suicide prevention activities are often underfunded and we all need to be advocating for a whole community response,” said Ms Emslie. “Not-for-profit funds could have a significant impact on preventing unnecessary deaths,” said Ms Emslie.“ Even if each fund saves one life it’s worth it.” The SuperMIND project collected, analysed and interpreted data on superannuation insurance claims relating to mental illness and suicide. The project examined insured claims of 13 funds and their administrators, including six insurers. The analysis – based on data from 2007 to 2011 – centred on claim rates per 1,000 members. Shane Fielding, Principal - group risk at IFS Insurance Solutions (IFSIS) said the research showed wide variations in the suicide rates across funds, gender and age groups.

SUPER NEWS

RESEARCH REVEALS LARGE VARIATION IN SUICIDE RATES ACROSS FUNDS

Margo Lydon and Angela Emslie

Even if each fund saves one life it’s worth it. “More than 15 per cent of all female death claims in the 15 to 24 age group are related to suicide,” said Mr Fielding. Mr Fielding said mental illness total permanent disability (TPD) claims also have variation between funds ranging from between two per cent to 28 per cent. “Male TPD claim rates are higher than females at all age groups with peak claim rates in the 50 – 54 age group,” said Mr Fielding. Analysis of the data can help funds and insurers better understand trends and support members, as well as proactively manage mental illness and suicide claims. Funds are encouraged to discuss the findings of the research with SuperFriend and IFSIS and can find out more information on the SuperFriend website.

LGS LAUNCHES MEMBER DIRECT OPTION Local Government Super (LGS) has joined the growing list of funds to offer a direct member investment option. The new option gives members access to shares from the ASX300, Exchange Traded Funds and term deposits. LGS chief executive, Peter Lambert, said that for LGS the option isn’t there to necessarily attract new members but to provide further choice to existing members. “We expect it to be a slow take up and even though justifiably it could be said to help combat the rise in SMSFs, it’s really there for those that want more control,” said Mr Lambert.

The member direct option has gone through a ‘soft launch’ stage where existing members were sent an e-mail and information was also placed on the LGS website. This will be followed by details on the new option in LGS’s annual statement pack. The option is available to members with balances over $10,000 on a cost-return basis and will provide investment choices while still delivering a high level of service, administration and compliance to members. Mr Lambert said introducing the option had been seamless. “In the first few weeks we had 16 ‘direct’ members approved,

LGS chief executive, Peter Lambert

however the real success is that we’ve offered our members the option as a choice,” said Mr Lambert.

SUPERTALK - December 2014

WHAT DO YOU WANT TO DO NEXT? Every day a new challenge. Every day a new opportunity. Our global reputation is built on the knowledge and expertise of our people. And our global capabilities across our Corporate and Investment Bank allow us to add more depth, breadth and integrity to our client relationships. With insights drawn from doing business in 100 international markets, and 140 yearsâ&#x20AC;&#x2122; experience in Australia, we understand what you want to do next. And just as importantly, we know how to make it happen. To see how we can help, visit jpmorgan.com/australia

ÂŠ2013 JPMorgan Chase & Co.

INDIGENOUS SUPER

FEATURE

Indigenous Super — SHOULDN’T BE ‘TOO-HARD’ SuperTalk reports on industry efforts to improve access and engagement in superannuation among remote Indigenous communities.

SUPERTALK - December 2014

INDIGENOUS SUPER

here are all sorts of challenges involved in searching for lost super, consolidating super accounts or even claiming benefits. Whether it’s the annoying phone time or the seemingly endless paperwork, these tasks have a habit of ending up in the ‘too-hard’ basket. Now imagine this ‘too-hard’ basket with the added challenge of having limited English language skills, no photo ID or birth certificate, and no internet or mobile phone access. This is the harsh reality for many Aboriginal and Torres Strait Islander people living in remote communities trying to understand and access their superannuation. In a moving address to more than 300 industry delegates attending AIST’s Australian Super Investment Conference in Alice Springs last September, Aboriginal financial literacy educator, Carolyn Cartwright, outlined the arduous journey involved in processing super payouts for clients in remote communities. Processing a single super payout can often take months to complete and typically involves the use of interpreters at every step, appointments with police to sign documents, searching births and deaths registers and making appointments with specialist doctors that might be eight hours away by car. One client – an elderly Aboriginal woman from the remote Anangu Pitjantjatjara Yankunytjatjara (APY) Lands in South Australia - had to travel 450 kilometres to personally authorise the transfer of clinical hospital records merely to satisfy her fund’s requirement for a birth record. Many of the identification issues have an historical basis. As Ms Cartwright explained, many older Aboriginal people who were born in the bush did not have birth documents. It was routine for Aboriginal names and birth names to be recorded incorrectly. But there are also cultural factors. Even today, many Aboriginal people have several

12 SUPERTALK - December 2014

Carolyn Cartwright explains the MoneyMob Talkabout program at the ASI Conference in Alice Springs

different names while kinship systems - which do not neatly fit into western conceptions of family relationships - can further complicate the process for nomination of beneficiaries and distribution of benefits. Compounding these issues is the fact that Aboriginal people on remote communities are more likely to miss out on accumulating super due to unemployment, intermittent, interrupted or short-term employment. And the gap in life expectancy means many Aboriginal people do not enjoy super to the same extent as other Australians.

TOWARDS A SOLUTION To gain a better understanding of these and other challenges facing Indigenous communities in regards to superannuation,

the Australian Securities and Investments Commission (ASIC) has been working with various groups within the super industry and the wider financial sector for the past few years. In 2013, ASIC facilitated a series of national forums involving Indigenous groups, consumer advocates and super funds and, more recently, the ASIC Indigenous Outreach Program invited representatives of QSuper to visit the remote community of Lockhart River in far North Queensland to hear first-hand about the community’s experiences with super. Closer to home, representatives of the Indigenous community, AIST, ASFA, FSC and Women in Super and other relevant stakeholders who formed an Indigenous Superannuation Working Group in 2012, have been working to release a discussion paper aimed

The systems don’t always talk to each other – we need a common sense approach Darryl Florance, AustralianSuper’s business development manager (NT) regularly travels from Darwin to Alice Springs and recently facilitated a meeting between AIST representatives and members of the remote Hermannsburg community, as well as financial counsellors in Alice Springs. He agrees engagement among Indigenous communities is growing: “We are definitely seeing more Indigenous people take an interest in their super but with so many barriers, particularly around the identification requirements, the danger is that people will give up.” According to Mr Florance, a shared frustration among Indigenous clients and the financial counsellors he has worked with is the lack of consistency with member identification requirements across super funds and data issues with the Australian Tax Office. “The systems don’t always talk to each other – we need a common

sense approach,” says Mr Florance. That approach, according to Cathy Binnington, Senior Manager of ASIC’s Indigenous Outreach Program, needs the super industry to take ownership of the issue and develop groundup solutions by working closely with Indigenous communities and the financial intermediaries, which are widely acknowledged as critical to Aboriginal and Torres Strait Islander people being able to engage and access superannuation. “There has to be an industryled solution for it to be successful,” says Ms Binnington. “As a regulator, we recognise that it is the super industry that understands the problems and is better-placed to find solutions.” There is also increasing recognition that any ‘solution’ must meet the cultural needs of communities and may require ‘outside-the-square’ thinking. In this regard, super funds may be able to learn from the banking sector. All of the four major banks have Reconciliation Action Plans in place involving public commitments to Indigenous training, mentoring and employment and the sector is working collectively towards a common identification system for Indigenous clients, with a trial currently underway. A former senior banker with ANZ and the author of a soonto-be-published PhD thesis on Indigenous financial capability, Vinita Godinho says it is vital that the super industry develops a better understanding of the cultural needs of Indigenous communities. This includes recognising that understandings of money and finances for many Indigenous people may be culturally distinctive from mainstream Australia. Her research finds that culture shapes how money is managed, as well as Indigenous perspectives on financial capability and wellbeing. For example ‘Indigenous money’ flows between related households, rather than being

bounded within a nuclear family household. Indigenous people may have distinctive attitudes to money, different priorities and money-related goals. “Financial education and marketing efforts which positively reinforce valued Indigenous social norms are going to be the most effective in the long term,” says Ms Godinho. Importantly, all those interviewed for this story were confident that addressing the challenges facing Indigenous communities in regards to superannuation won’t end up in the too-hard basket. “We are optimistic about finding solutions as there are many passionate people from the super industry involved,” notes Ms Binnington. “But we also need individual funds to recognise that improving access to super among Indigenous communities is not a fringe issue – it is a ‘business as usual’ issue that should be part of a super fund’s KPIs.”  jds

KEY FACTS 01

Aboriginal and Torres Strait Islander population is about 670,000

Life expectancy is around 10 years less than non-Aboriginal people

Indigenous labour force participation is around 60%

English is often a second, third or even fourth language in remote communities

Source: Australian Bureau of Statistics

SUPERTALK - December 2014

INDIGENOUS SUPER

at fostering an industry-wide program to recognise and address some of the key problems. Plans are also afoot for an Indigenous superannuation summit to be held in 2015. AIST Executive Manager of leadership and governance, Eva Scheerlinck - who helped set up the Working Group – says super has emerged as the number one issue for financial counsellors working in remote Indigenous communities. “The good news is that awareness about super is growing in remote Indigenous communities but there remains the challenge for these communities to understand and engage with it,” says Ms Scheerlinck.

DATA & TECH

Funds need to develop a top-down thirst for data Super funds have been advised to create a ‘data culture’ that starts at the top and runs through the entire organisation. Speaking to an audience of more than 80 trustee directors and fund staff who attended AIST’s inaugural Data and Technology Symposium, Australia Post’s head of data, Paul Ormonde-James, said data should no longer be left with IT. Mr Ormonde-James asked delegates to consider where data is coming from and the purity of it“just as you would bottled water”. “Water is captured, stored, packaged and at the end is delivered,” said Mr Ormonde-James, “People trust that the bottled water they get is of good quality and it’s the same as with data.” However Mr Ormond-James said judging if data is clean is not always easy. “It takes the whole business to maintain high data quality so it’s important to build a culture where - rather than questioning data quality is a task - it becomes second nature. Your people can look at these things, compare these things, and actually without any force, tell the difference,” he said.

Data is like water, you can’t live without it Mr Ormonde-James also recognised the often negative reaction to the word ‘data’ and called for funds to show the importance of data through

14 SUPERTALK - December 2014

Paul Ormonde-James uses water to represent data

workplace policies. One idea included writing in a data policy, as funds would for safety or privacy. “Data is a dirty word, you think data and you think rules and fines. Why can’t we love data like we love safety?” he said, “Just as we can’t live without water, we can’t live without data.” Mr Ormonde-James said it was important for IT and marketing staff to communicate with boards and senior management in layman’s terms rather than over-used

business jargon like ‘big data’. An audience poll at the symposium found that 27 per cent of delegates believe executive management is driving their fund’s big data strategy’ – suggesting there is a push to understand and actively engage with data from the top down. This was closely followed by 25 per cent who believe marketing is driving their strategy and 23 per cent who responded with IT.

PROFILE

5 MINUTES WITH

Anne-Marie Corboy After 16 years at the helm, HESTA’s CEO Anne-Marie Corboy will step down from the fund in February 2015. SuperTalk spoke to Ms Corboy about her achievements, her views on the challenges ahead for super and her own plans for the future.

Anne-Marie Corboy speaking at the AIST Women’s Super Summit Feb 2014

What are three of your proudest achievements at HESTA?

——Producing strong long term returns and introducing a free advice service to our members so they can make informed choices. ——Developing a great management group with the growth of the organisation, the majority of whom are women. ——Recognised as an advocate for public policy positions which will benefit low and middle income earners where women are the majority.

of members. Many of our members are in their 40s, work part-time and have had breaks from the workforce. These are the people most disadvantaged from an income-based benefit. The profile of members has changed a little but because our key membership groups come from health and community services, many of the occupations we cover have stayed the same. How does the role of CEO compare to your previous role as a trustee director? The roles of CEO and Director are very different. In both roles you need to understand the difference between setting strategy then operationalising and implementing it. The similarity is that the members always come first.

is important to be able to make tough decisions – which sometimes cannot be explained due to the nature of the reasons behind them. You also need compassion and understanding. Another role of a leader is to develop a successful team with people who have a range of different skills and abilities to complement each other. What career advice have you given to young people? I always tell people to try new opportunities and try and do some things outside your comfort zone. Sometimes you don’t know the great places where things can take you. What are your plans for next year? I hope to have a couple of extra non-executive roles in addition to the ones that I will have in March. Some flexibility in my life will be welcome.

You have always been a strong advocate for women. Has the industry done enough to close the gender gap in retirement savings? There are still many areas that can be addressed to make tax concessions for super more equitable. I don’t think there is enough real action from across the industry on these issues.

What do you see as the key challenges ahead for not-for-profit super funds? I think it is important that funds continue to evolve. We have always needed to deal with change so embracing challenges and turning them into opportunities can enhance organisations. A classic case of this for HESTA was choice of fund when this was introduced in the 90s. Having always been in a competitive environment HESTA saw this as an opportunity and grew its membership as a result.

Is there a typical HESTA member and, if so, has this profile changed in the 16 years you have been with the fund? HESTA covers a wide diversity

What are the key qualities of a good leader? I think leaders need to be able to project their vision so that others can easily embrace it. It

Opportunity, Education Department of Victoria, 1985 —— Elected official with the Victorian Education Unions – AEU, FTUV and VTU 1988 – 1997 ——CEO HESTA 1998 – 2015 ——Many Director and Chair roles including Netball Australia, the MCG Trust, Peter MacCallum Cancer Centre, Kangan Institute, Northern Health, Victorian Superannuation Board, State Superannuation Board, Women in Super, ACSI, ISA, AIST, CMSF, IFS, IFF, SMI and ASFA

SUPERTALK - December 2014

CAREER IN A NUTSHELL

——Primary Teacher 1976 - 1987 ——Consultant, Equal Employment

16 SUPERTALK - December 2014

5 GEN YS IN SUPER

5 things you didn’t know about 5 Gen Ys in super Meet five Gen Ys who are making their mark across a range of areas of super and have plenty to say about the industry’s challenges.

01 She is innovative in her approach, friendly, and has the time to chat with everyone.

DAISY CHIUMBURU Administration and Insurance Officer – CareSuper “My initial perception of superannuation was very far from the reality of super and there is a place to discuss it in everyday life” 1. Tell us about your current role: I have been at CareSuper for four years and in my current role for a year. I enjoy the diversity of the role and excitement of being part of industry where there’s still much more for me to learn and plenty of twist and turns – it’s an adventure. 2. Who do you admire in the industry? Cate Wood – she has continually been an advocate for the super industry and has been a voice that has highlighted the gender discrepancies of retirement account balances that have marred industry history.

3. How can super engage young people? I always tell my friends that super should be viewed like any other goal or accomplishment in your life that you want to achieve. Like anything, you need to plan, prepare and be proactive- and super has the bonus gift of compound interest. 4. Name a big achievement: I left home (Zimbabwe) when I was eighteen to come and study in Australia, leaving behind my family, friends and all the comforts of my upbringing. I thought I would be living like the ‘college kids’ on all the American television shows I watched growing up – how fabulous! The reality was slightly different. The experience has played an enormous part in how I view the world, the person that am today and who I would like to become. 5. What industry challenges lay ahead? Maintaining a competitive advantage alongside retail funds in a sustainable and durable way, especially in a post MySuper landscape.

SUPERTALK - December 2014

5 GEN YS IN SUPER

LUKE FRASER

TIM PETERS

Relationship Manager, Business development and distribution – QSuper

Investment Analyst – First State Super

“I take pride in being able to help employers enhance their financial wellbeing offerings to enhance their employee’s financial awareness.”

“Often it is easier to do what the rest of the industry is doing, but it takes conviction, knowledge and some guts to do something different.”

1. Tell us about your current role: I have been a relationship manager in QSuper’s Business Development and Distribution division for nearly a year and a half. I work with QSuper employers in the health sector to help, guide and advise them so they can engage their employees (our members) on the benefits of being a member of QSuper.

1. Tell us about your current role: I have been in my current role for two and a half years. I enjoy being involved in various investment decisions across a range of asset classes, all of which ultimately link back to the success of the fund. I like the challenge of assessing new concepts or having to discuss completely different aspects of the investment universe.

2. Who do you admire in the industry? Rosemary Vilgan– Apart from being inspired by Rosemary becoming QSuper chief executive at the age of 33, one of the reasons I moved to QSuper was I admired the innovative strategy they were rolling out.

2. Why did you choose to work in super? Super is a growing part of the Australian financial landscape and, from my perspective, the way funds approach investments is undergoing a period of dramatic and rapid change. Contributing to that change is a fulfilling opportunity.

3. What industry challenges lay ahead? Embracing and leveraging technology to create a personal and tailored member/customer experience, increasing competition on both an employer and member level and potential changes to fund product distribution models, and the increasing size and scale will make it more difficult to find assets that are suitable for investment.

3. What industry challenges lay ahead? Building out the investment capabilities of growing super funds to rival global counterparts. What should funds insource and continue to outsource and why? How does the changed structure alter alignment of interests and risks? How do we reduce investment biases in a thoughtful and informed manner? What are the funds’ investment objectives?

4. Name a big achievement: In 2013 I was recognised by the Australian Institute of Management as one of 30 Rising Stars in Management across Queensland and the Northern Territory. The initiative acknowledged me for ‘Making a mark in business, the community and amongst peers’. It validates the results I have achieved working my way through the super industry. 5. Name something interesting you’ve learnt: The magic of combining compounding interest and regular (even small) contributions and the difference it makes to account balances over time. In the seven years I have been working in super it has made an incredible difference to my account.

18 SUPERTALK - December 2014

4. Name a big achievement: Getting through each of the three Chartered Financial Analyst (CFA) exams on my first attempt. As anyone who has completed the designation knows, this requires sacrificing your social life for more than a couple of weekends. 5. Name something interesting you’ve learnt: The pace at which money is moving from accumulation accounts to pension accounts across the entire industry. I believe the implications this will cause across the industry will be huge, from member engagement, product design to investment style and strategies.

5 GEN YS IN SUPER

ERIN SALES

EMILY TEED

Campaign Manager – Industry Super Australia

Partnership Delivery Officer – HOSTPLUS

“I am proud to work on campaigns for good public policy that have the potential to impact every worker's life. It doesn't get better than that.”

“It is so important that we maintain a high level of engagement with governance and best practice investment policies to enable every Australian to retire with dignity.”

1. Tell us about your current role: I have been at Industry Super Australia for five years, but I have only been in my current role (working on government relations) a short while. It is shaping up to be great - I love the fact that there are constant challenges. 2. How do people react when you say you work in super? It's not something you'd usually want to mention at school pick-up. People's eyes glaze over. As soon as you explain what it means though, that it's not just like working for a bank, that it's about good social policy, then people are more interested. 3. How can super engage young people? This might be controversial but I don't think young people should be interested in super, at least not any more than it takes to keep their super in an industry fund and not think about it again. The system works best when the default settings make sure that people can be disengaged and know they won’t live in poverty in retirement. It's our job to make sure the default settings work. 4. Name a big achievement: It is a bit of a cliché as a biggest achievement, but I have two young kids and I work part-time. Anything could be going on at work while I am cutting up fruit at kinder. For me being fine with not working full time has been a serious achievement. 5. Name something interesting you’ve learnt: I'm not sure if interesting is the word, but I remember being infuriated to find out that super isn't progressively taxed. It isn't right that the people that can least afford it pay as much or more tax on their super as they do on their wages.

1. Tell us about your current role: I have been working for HOSTPLUS for almost three years and have been in my current role for two. My favourite element of my role is the strategic approach to forming partnerships. Having a creative strategy to expose your brand to the community is fascinating. 2. Who do you admire in the industry? Eva Scheerlinck. I rubbed shoulders with the likes of Garry Weaven and Mavis Robertson through the AIST graduate program but the most influential person was Eva herself. She has a passion for NFP super that is inspiringly contagious and purely in the best interest of all. I admire her professional accomplishments and her ability to foster others’ talents. 3. How can super engage young people? Before they can even think of retiring, they have to pay off their HECS loans, buy a house and worry about more immediate financial necessities. Funds need to engage them with things that can help them now, and by proxy educate them about super to then instigate higher engagement with their superannuation needs. 4. Why did you choose super? My father works in investments, and always expressed the importance of everyone retiring with dignity. I was raised in the US and Canada and have seen firsthand how people struggle without insurance and their own retirement savings. 5. Name a big achievement: Playing ice hockey on the National Women’s Team - including winning bronze at the 2013 World Championships in Auckland, New Zealand. In 2014, we went to Harbin, China to participate in the Asia Cup and also Italy for the 2014 World Championships in Asiago.  sg

19 SUPERTALK - December 2014

SUPERTALK - December 2014

FUND GOV 2014

Fund Governance Symposium 2014

Eva Scheerlinck, Louise du Pre-Alba and Martin Lawrence discuss the future of governance

APRAâ&#x20AC;&#x2122;s Stephen Glenfield brings a regulator perspective

David Coogan and Michael Dundon catch up between sessions

Mark Bland gets delegates thinking at the conflicts of interest workshop

Passionate discussion continued well into break time

Michael Wilson reading his way through the case study

20 SUPERTALK - December 2014

AGEING AUSTRALIA

Should we be concerned for an ageing Australia? It’s no secret that Australia is ageing. Our population is projected to increase to around 38 million by 2060, when one in four Australians will be aged 65 years or more. Gerascophobia is the fear of growing old or ageing. The term refers to the condition suffered by an individual and comes from the Greek word “geros” or old man. While normally it is individuals that fear growing old, we are now being told that we, as a nation, should be concerned too. The potential impact of our ageing nation on the sustainability of our retirement income systems has not escaped the Government. This year’s budget announcements flagged an increase to the Age Pension eligibility age that eventually could see younger Australians waiting additional years to age 70 to access the Age Pension. Treasurer Joe Hockey has flagged a possible increase to the preservation age – the point at which people can access their superannuation. Speaking at a Young Super Network lunch in Melbourne, Deloitte Partner Stephen Huppert, warned that the ageing population would pose many challenges to individuals, society and the super industry. Mr Huppert said the current retirement system - made up of three pillars of compulsory super, the Age Pension, and voluntary contributions – was making a difference to the lives of Australians. “About one in four Americans are not saving for retirement. At least in Australia we know that most people will have some degree of super,” said Mr Huppert. According to Mr Huppert, around 80% of recent retirees rely wholly or partly on the Age Pension and there’s no expectation of these

Deloitte Partner Stephen Huppert speaking at a Young Super Network lunch

numbers changing any time soon. “While we don’t expect that number to change very much, we do expect to see a decrease in those with a full reliance on the Age Pension as super balances get larger,” said Mr Huppert. The ageing population and lack of adequacy of superannuation savings necessitates the need for a fourth pillar to our retirement system, says Mr Huppert. This might be extending work life, working part-time, or using equity release products. While the call for longer working years may not suit every worker, Mr Huppert argues that increased life expectancy calls for longer working years in those that can afford to keep going. “When the Age Pension was introduced most Australians didn’t live to 65, or those who did, were expected to live another ten years,” said Mr Huppert, “Today, men reaching 65 are expected to live another 19 years and women another 22 years.” “The superannuation industry is good at getting money into the

3 KEY TAKEOUTS

——For most Australians, retirement income will be a combination of age pension and superannuation savings. ——Ageing population is creating challenges for individuals and for the Government. ——Our superannuation system is good at getting money in but more needs to be done to help members transition to retirement and once they are in retirement.

system, but we fail members as they get closer to retirement,” he said. So what is the key to a more sustainable system? Mr Huppert says we need to better integrate the super system with the Age Pension system. “They need to work together – most members need both.”  sg

The Young Super Network (YSN) is open to all employees within the superannuation sector. Membership is free. Contact info@aist.asn.au to join today.

SUPERTALK - December 2014

FEATURE

Call centre revamp delivers for staff and customers SuperTalk spoke to Luke Jamieson, Manager of UniSuper’s member services, about some of the new staff initiatives at the fund’s award-winning call centre, whose customers are arguably among the smartest in Australia. On weekends, the city of Melbourne is swarmed with tourists, coffeeconnoisseurs and shoppers while the nine-to-five office buildings sleep. But one weekend a group of UniSuper employees gathered at 385 Bourke Street to transform their workspace – in their own time. Staff of the contact centre wanted to decorate their own office space and - with permission from the executive team - have created a friendly and inspiring space reflective of their culture. The revamp included a new paint job, a wall-sized chalk board, as well as a bold display of the centre’s mission statement – all staff decisions. .Overseeing the project was Luke Jamieson, who began life at UniSuper as a Call Centre team leader before moving into his current role. With over ten years’ retail and industry experience in contact centres and superannuation, Mr Jamieson now manages about 50 call centre staff, all of whom were involved in the weekend office revamp. “The guys went out and bought paint, came in on the weekend and did it all themselves – it was voluntary,” said Mr Jamieson. He did, however, admit he was relieved by the team’s colour choice. “There was a small committee of consultants who got together and decided to visit marketing so they

22 SUPERTALK - December 2014

Luke Jamieson, Manager of UniSuper’s member services, says the fund’s membership includes some of the smartest people in Australia

could colour match the paint to the fund colours,” he explained. Stressing that he had no influence on his staff’s decorating choices; Mr Jamieson said he was particularly touched by the use of the team mission statement. “As a manager to have your staff want to put the mission statement up on the wall, without you saying it, was really powerful,” he said. The office revamp is one of a number of new initiatives to be introduced at the Call Centre, which boasts numerous awards, notably the 2013 International Customer Management Institute’s (ICMI) Global Call Centre of the Year Award (Small to Medium) Award.

The centre is now comprised of three teams: The correspondence team that handles the enquiries from the website, e-mails and social media; the inbound contact centre comprised of two teams of nine; and an outbound team who are all RG146 compliant and able to provide general advice. The fund recently began conducting ‘voice of members’ feedback surveys, sending out over 400 each fortnight, with an impressive response rate. According to Mr Jamieson, the fund is getting between 150 and 180 responses back on their long six minute survey. The survey is sent out via e-mail and provides a number of

FEATURE PROFILE The “genuine care model” on UniSuper’s new blackboard wall

metrics, including an overall score out of ten. Members who rate the fund less than five – a red flag – trigger an instant e-mail back to team leaders allowing UniSuper to make contact immediately and rectify the situation. On the flipside, if a member rates the fund 9.8 or higher – a green flag – the feedback is sent directly to team leaders and the information is used as best practice. At the time of writing, the previous week had a total of 84 green flags, compared to four red flags. “Our CEO and executives listen to calls, even our marketing and advice teams listen to calls, it engages our business,” said Mr Jamieson. “The contact centre is the first engagement point on what members are saying, the sentiment – we get verbatim feedback.”

We ask employees to think about the feelings and emotions involved

He attributes the centre’s success to culture, a philosophy of ‘genuine care’, and the fact that the team enjoy what they do. “We don’t measure traditional key performance indicators like handle time. Our measures are based around quality,” said Mr Jamieson. “We started applying for awards to engage the team and show them they don’t have to see contact centre roles as a stepping stone, it can be a career.” The result of the UniSuper ethos is an average tenure of 2.6 years, an almost negligible attrition rate over the last 3 years. Most employees that leave the contact centre find roles in other parts of the fund – something the fund can fall back on in the event of an influx of calls. “At the beginning of the year we had a big lift in call volumes – during that time we could call on the other parts of the business to borrow back staff. Within hours they were set up and on the phones,” said Mr Jamieson. Mr Jamieson believes the role of a manager is to provide a great work environment for the team, a

vision and to ‘get the road blocks out of the way’ - an approach that can apply to a contact centre of any size. “Performance is based on the philosophy, the people you hire and doing what you say you’re going to do,” he said. While efficiencies are important, the real change for UniSuper was moving the focus to quality – running regular training for employees and making sure initial training is thorough. “You wouldn’t expect to walk into an office and talk about connection, love, empathy – but we ask employees to think about the feelings and emotions involved – they are people on the other end of the phone, not just numbers,” said Mr Jamieson. “Our membership includes some of the smartest people in Australia and they are calling us. It’s not about how fast we answer the phone, it’s about getting an answer and only having to call once. That really shifted our focus from efficiencies to knowledge management and becoming superannuation experts.”  sg

SUPERTALK - December 2014

FEATURE

Moving super from a B+ to an A Australia has yet again rated highly in the Melbourne Mercer Global Pension Index. Speaking at the launch of the 2014 index, lan Silk, Chief Executive, AustralianSuper reflected on the success of our compulsory super system and outlined what he thinks is needed to take super to the next level. The following is an edited version of his speech. Let’s dispel a significant myth that is popular in some quarters at the moment. The idea that somehow the system has failed because most retirees are receiving some or all or the Age Pension is wilfully ignorant of the system’s original intent and the fact that our compulsory super system in Australia is not fully developed. Indeed, nobody has yet retired having received mandatory super savings for all of their working life. To this point, nobody has been in the compulsory super system long enough to receive its full benefits. The average 65 year old retiring today: —— only started receiving 9 per cent SG payments in 2002 when they were 53 —— was receiving only 3 per cent in 1992 when they were 42 —— and, if they were receiving Award super, they were receiving only 1per cent in 1986 when they were 37. Nobody involved at the inception of the universal super system in Australia thought it would replace the age pension, especially after only 20 years of operation. Our focus should be on how we make the best of a system that is still developing, but is increasingly helping to ease the burden on the public purse. In this respect the system is

24 SUPERTALK - December 2014

lan Silk, Chief Executive, AustralianSuper: Super is increasingly helping to ease the burden on the public purse

working. Of the population eligible for the Age Pension, around 50 per cent are currently on a full pension while around 30 per cent are on a part pension. Treasury estimates that by 2035 there will be an equal number of full and part pension recipients.

AREAS FOR IMPROVEMENT What do we need to do to get even better outcomes for working Australians? How do we move from a B+ in the index to an A? I think there are five key areas that need attention:

1. SCALE BENEFITS The system should exist to benefit members. A key element of this is making sure they receive the benefits of the increasing size and scale of the system. We need a step-change in the relationship between the increasing super savings, and the increasing amount that is paid to agents in fees and costs. We are talking about a significant amount of money. Rainmaker found in 2012 that the superannuation industry drew $20.1 billion in fees and costs per year.

2. INCREASING EQUITY AND SUSTAINABILITY One positive measure to consider is the introduction of lifetime contribution caps. Such a move would increase both the equity and sustainability of the system. We saw a perverse decision made recently when the Government announced it would scrap the Low Income Superannuation Contribution effective from 2017. As a result, the 3.6 million Australians that earn less than $37,000 a year are going to be the only people in the Australian superannuation system that do not get a tax concession on their superannuation contributions. More than two million of those people are women. This is an inequitable and retrograde step.

3.INCREASING ADEQUACY The current level of the Superannuation Guarantee of 9.5% per cent is not enough. Delaying the rise to 12 per cent until the middle of the next decade is poor policy. For an average income earner,

FEATURE

Financial services, and super in particular, seems slow at best and unwilling at worst, to pass on the benefits of scale. This is ultimately an issue for trustees and management of funds. Consumers also need a more robust and transparent system of fee and cost disclosure. We need a mandatory single methodology, to calculate and disclose investment fees and costs. We also need to remember that while fees and costs are important, the most important issue is the net benefit to members.

aged 25, the delay in the SG will cost their super savings around $100,000 over their working life ($36,000 in today’s dollars). Perhaps the worst part of the decision to delay the increase is the hypocritical way the increase has been waived away. On one hand policy makers complain that the superannuation system isn’t doing enough of the heavy lifting, and on the other they deny superannuation guarantee increases, saying it’s better for people to have the money in their pocket. Well, you can’t have it both ways.

4. GREATER STABILITY The level of policy change in the superannuation sector in Australia is mind-boggling. This is not so much a problem for the industry, but the endless inquiries, reviews and policy changes seriously undermine consumer confidence. Australians need superannuation policy making that isn’t part of the threeyear, Canberra-centred political churn, or worse- the annual budget cycle.

5. SHIFTING TO DEFAULT RETIREMENT INCOMES The final area for improvement is a shift in focus from lump sum

to retirement income streams. As an industry, we have not been very good at communicating and promoting this idea. It’s really what the Australian superannuation system is aboutincome in retirement, not lump sum at retirement. We have made the lump sum the goal of the system. But the purpose of super is to provide members with an income in retirement. We need to raise awareness that even an apparently small amount can be a very effective top up of the Age Pension to increase a member’s standard of living in retirement. We need to move to a hybrid system where people on the Age Pension are also contributing with their savings. The new category of ‘contributing retirees’ needs to grow. Creating a default income stream would be a constructive step. It takes away the reflex action of withdrawing a lump sum from superannuation when it is not necessary, and sometimes not in the member’s best interest. And the onus for a default retirement income stream should be greater for people with large balances. We need to raise awareness that even an apparently small amount can be a very effective top up of the Age Pension to increase a member’s standard of living in retirement.

SUPERTALK - December 2014

SUPER GRADS

Super Grads program reaches 10 year milestone As we celebrate the 10 year anniversary of AIST’s Super Grads program, SuperTalk examines the journey taken by current and former graduates of this unique program. Beginning in 2004, the Super Grads program was established to assist graduates to develop a career in the not-for-profit superannuation sector and to bring fresh ideas and a new perspective to the industry. To date this has involved 99 graduates – with another 19 graduates drawn from all around Australia (and, in one case, overseas) having completed the program in November. Participating in the Grads program is much more than just signing up and finding an employer; The Super Grads journey begins with a multi-stage recruitment process whereby applicants are screened by both AIST and external parties. Details of the best candidates are then shared with participating funds and service providers. The 2014 Super Grads were placed across 17 different organisations including 12 different super funds,

26 SUPERTALK - December 2014

two administrators, two industry organisations and one charity - one graduate even made a permanent move from New Zealand. “Moving to Melbourne has given me the opportunity to step foot into the fast growing superannuation industry in which I can actively contribute towards creating a better retirement outcome for all Australians,” said 2014 Super Grad Ashleigh Matherson. The twelve month program commences with an intensive residential where the graduates complete superannuation- specific training such as RG146 as well as soft skills training. The graduates are also supported by a mentoring program throughout the year as well as visited by many industry professionals including Garry Weaven, Mavis Robertson, Stephen Glenfield and Cath Bowtell.

Super Grad Elise Kerr from Women in Super/Mother’s Day Classic said that the program – particularly attending the Conference of Major Superannuation Funds – has given her confidence to step out in the industry. “It was a great way to get up to speed with industry issues and create valuable networks that I wouldn’t have been able to do if I wasn’t a Super Grad,” Ms Kerr said. The graduates have a range of different backgrounds and skill sets from marketing to investments and are encouraged to look at many roles within the superannuation industry. Graduates are required to complete two external placements to help broaden their knowledge and experience different workplace environments. Adityayan Banerjee – a Super Grad from Superpartners – spent

However it isn’t just the current Super Grads that are reaping the benefits of the program. According to AIST Executive Manager, Leadership & Governance, Eva Scheerlinck, around 80% of former graduates have remained in the not-forprofit superannuation sector. “The program was designed as a way of feeding new talent into our industry and the fact that we have such a high retention rate is evidence of the program’s success,” said Ms Scheerlinck. Australian Council of Superannuation Investor (ACSI) Executive Manager, Governance & Engagement Ed John is a proud former Grad, having completed the program in 2008. “The program gave me a great introduction to a fast-growing and dynamic sector – an industry with a long-term focus and a strong profit-for-member ethos,” said Mr John, “Super Grads combined formal professional development and training with invaluable mentoring, and networking with thought-leaders in the industry.”  sg Applications for the 2016 cohort of Super Grads open in March. Anyone interested in learning more about the program should contact AIST Leadership Programs Manager, Rob Demasi at rdemasi@aist.asn.au

WHERE ARE THEY NOW?

SUPER GRADS

one week at AustralianSuper in the Management Accounting team analysing the impact of the timing of accounts payable transactions on funds available for investment. “The task was engaging, challenging and, most of all, meaningful. Knowing that my analysis had been sent to the general manager of finance and would be implemented gave me a great deal of satisfaction and pride,” said Mr Banerjee. Another graduate, Sarah Bowman, who is currently employed by Cbus and spent a week with ME Bank’s digital team, was surprised at how much work goes into building an app. “With apps being so commonplace now I just assumed it would be a simple process. I was wrong. Overall, it was an enjoyable experience and I learned some valuable skills,” Ms Bowman said. Other graduates - such as Phillip Phung from CareSuper - used the placements as a way to learn more about service providers employed by their fund. ‘‘Enquiries from members could range from being unbelievably complex to relatively simple. As I observed how the call centre staff handled the calls with professionalism and efficiency, I gained a lot of respect for them and an appreciation for their service to our members,’’ said Mr Phung.

Zoe Heath Client Relation Manager – First State Super

Scott Malpass Investment Officer – AvSuper

Trent Van Gool Reporting Analyst Business Intelligence – Superpartners

RISING STAR AWARD WINNER Congratulations to James Birrell, Portfolio Manager, Equip, the 2014 Rising Star. The AIST Investment Rising Star Award - supported by Hermes Fund Managers - fosters and encourages young investment professionals to aspire to be the next generation of investment leaders in the superannuation industry. Mr Birrell will undertake a strategic leadership study tour in the UK that includes visits and workshops within UK pension schemes such as the BT Pension Scheme, investment management firms and industry bodies. Applications for the 2015 Rising Star Award open in April next year.

Ian Manton Hall, James Birrell and Tom Garcia

Rising Star Award proudly supported by:

SUPERTALK - December 2014

Success lies in the hidden details

Our extensive research provides detailed insight, helping us uncover investment opportunities that have historically delivered consistent performance.

Research on 90% of the world’s largest listed companies every 90 days*

Analysts on the ground around the world sharing ideas every day

For more information, visit www.fidelity.com.au/institutional

Past performance is not a reliable indicator of future performance. This document was issued by FIL Responsible Entity (Australia) Limited ABN 33 148 059 009 AFSL No. 409340 (“Fidelity Australia”). Fidelity Australia is a member of the FIL Limited group of companies commonly known as Fidelity Worldwide Investment. You should consider whether this product is appropriate for you. You should consider the Product Disclosure Statements (“PDS”) for Fidelity products before making a decision whether to acquire or hold the product. The relevant PDS can be obtained by contacting Fidelity Australia on 1800 119 270 or by downloading from our website at www.fidelity.com.au. This document may not be reproduced or transmitted without the prior written permission of Fidelity Australia. The issuer of Fidelity’s managed investment schemes is FIL Responsible Entity (Australia) Limited ABN 33 148 059 009. *Global market coverage data is based on FIL Limited coverage of the MSCI World Index as at 30 September 2013. © 2013 FIL Responsible Entity (Australia) Limited. Fidelity, Fidelity Worldwide Investment and the Fidelity Worldwide Investment logo and F symbol are trademarks of FIL Limited.

ASI 2014

ASI 2014 This year’s AIST’s Superannuation Investment (ASI) Conference 2014 was held in September at the Alice Springs Convention Centre.

Delegates registered and ready to go

Bob Browne looks at the future of emerging markets

Drum Atweme provide a great dinner atmosphere

Sarah Browne and Marlene Spencer speaking to ASI delegates on the Western Desert Dialysis Program

Vanessa Wang explores the design and issues of the Asian pension system

Dr Jim Minifie drills down on this year’s hot topic – fees

Delegates contribute to live polling courtesy of AXA Investment Managers

SUPERTALK - December 2014

AIST AWARDS

AIST Awards 2014 AIST’s 2014 Awards for Excellence have recognised the achievements of the not-for-profit super industry. Ten awards and two scholarships were announced at Melbourne’s RACV Club late last month, with a few familiar faces!

1. P aul Kessell, Kinetic Super, proudly accepts his award from AIST CEO Tom Garcia.

6. G raeme Arnott accepts an award on behalf of Dr Rosemary Kelly from First State Super who was overseas.

2. Scholarship winner HOSTPLUS Michelle Di Fabio with Sinclair Scholfield from Industry Partner, State Street.

7. Katarina Mucic and Geoff Brooks from Equip accept one of two awards for the fund on the night from Jo Bean.

3. Angela Emslie hands over the Finance Award to Melinda Hughes of Telstra Super.

8. The VicSuper team with their Communications Award for Excellence – Annual Report - joined by Jo Bean.

4. Sharnie Barabas from Australian Catholic Superannuation & Retirement Fund with Garry Martin from Industry Partner, Superpartners.

9. Angela Emslie joins the HESTA team for a happy snap with their three awards - Super Business Development Award for Excellence, Communications campaign/project (funds over $10B FUM) and Platinum Communication Award.

5. Leonie Curtis from AMIST Super and Garnet Meekings with Jo Bean from Industry Partner, ME Bank.

30 SUPERTALK - December 2014

SuperTalk spoke with Brenda Mills, Legal and Compliance Manager at REST Industry Super and the winner of the 2013 AIST Fund Staff Leader Development Scholarship. Brenda – who has been at REST for almost ten years – used her scholarship to attend a leadership course at Harvard University. Which course did you attend and what did it entail? “Leadership for the 21st Century: Chaos, Conflict and Courage” was offered by the Harvard Kennedy School. It was a five day program that introduced a set of conceptual frameworks combined with a unique teaching method for exercising leadership. This challenged us to look beyond formulating quick technical solutions that act as a band aid and to examine deeper organisational challenges, including our own values and the competing commitments and loyalties of where we work. What was your experience like at Harvard? Harvard was fantastic! The training offered is about managing change and it is up to each participant to reflect upon their own particular challenges with the group and in individual sessions. While participants were not familiar with the Australian super system, (though many had heard of it and were impressed) the challenges that we face share many similarities with those around the world in different spheres of work, e.g. political and regulatory change, innovative offerings, meeting client requirements and staying abreast of technology.

What were your key take-outs for what funds should be doing to managing change? Managing the individual and institutional dynamics of change is an important skill for funds to stay relevant when external factors impact current business models. Super funds are subject to a heavy regulatory burden which is commensurate with their status as custodians for compulsory retirement savings of members. There is more change to come as we see various regulatory consultations, inquiries and modern award process changes ahead. We have to skilfully navigate through these changes while still honouring our member heartland, so that we can continue to survive and thrive. How do you expect the governance landscape to change over the next few years? The growth of super and increasing level and complexity of regulation will require increased co-ordination between regulators and an enhanced focus on achieving efficiencies and better retirement outcomes for our members. We need to continue to focus on the long term in terms of any policy changes and achieve the right balance between regulation and systemic efficiencies. At the

PROFILE

AIST Scholarship winner gets tips from Harvard about managing change

Brenda Mills, Legal and Compliance Manager, REST Industry Super

trustee level, there is increasing emphasis on managing systemic risk as a regulatory driver for our frameworks. We also need to keep step with innovation in product design and flexible retirement options as Australians increase their longevity. What challenges do you see ahead for the not-for-profit sector? We can expect further changes, particularly in the modern award landscape and possible changes arising from the Financial System Inquiry. Changes to better facilitate the use of electronic disclosure for member communications would add to efficiencies for the fund, however the needs of members must be considered at all times to ensure that while the fund changes its processes, its focus remains on meeting their best interests. Would you recommend for others to apply for the scholarship? The scholarship provides a great opportunity to study at the top teaching institutions around the world. I certainly recommend this course. Harvard provides innovative teaching, and an extremely interesting forum for sharing insights with people from all over the world. Thanks, AIST for this fabulous opportunity!

SUPERTALK - December 2014

MEMBER NEWS

Member news INDUSTRY APPOINTMENTS AUSCOAL superannuation fund has appointed Christina Langby to their board, replacing director Henry Skene. The fund has also appointed Stephen Rowbottom to a newly created chief financial officer role. Australian Catholic Super and Retirement Fund chief investment officer Anne Whittaker is retiring after six years service at the fund. Ms Whittaker had previous roles at ASFA as well as 14 years at Mercer Investment Consulting. Michael Block will fill the role in December. AustralianSuper has appointed existing board member Dave Oliver as deputy chair of the fund. Mr Oliver replaces Paul Howes who departed in July. Mr Oliver has served on the board since 2007. Energy Super has appointed William Graus as general manager of investments, a new position for

the fund. Mr Graus was previously a senior investment office at ESSSuper. LGsuper has appointed independent director Bronwyn Morris as chair of the board. Ms Morris replaces Brian Roebig who is retiring after 19 years. LGsuper has appointed Scott Armstrong as its new Property Portfolio Manager. Media Super has appointed Erick Cordero as general manager of growth. Mr Cordero was formerly employed by REST in sales and relationship management.

number of independent directors on the board to four. Quadrant Super and Tasplan will merge and operate under the new name Tasplan. Quadrant CEO Wayne Davey will lead the merged operations late next year with Tasplan CEO Neil Cassidy due to retire. The new board will be chaired by Naomi Edwards. REI Super has appointed Claire Higgins as new chairperson. Ms Higgins is currently the chair of the Country Fire Authority Victoria.

NGS Super has appointed Georgina Smith to its board – creating an equal gender ratio. Ms Smith is a former school principal and has worked in education for 35 years.

TWUSuper has appointed Paul Sayer as chief executive, replacing Debora Jackson who resigned in December last year. Mr Sayer was previously chief operating officer at REST.

Prime Super has appointed Martin Day to its board following the recent merger with Health Industry Plan. Mr Day was previously chief executive of St Vincent’s Private Hospital Melbourne and brings the

Vision Super has appointed Joanne Dawson to its board as an independent director. Ms Dawson is a former NAB executive and also headed up a financial planning business.

MTAA SUPER TURNS 25 MTAA Super celebrated its 25th birthday with a function at the National Arboretum in Canberra addressed by fund Chair John Brumby and CEO Leeanne Turner. Mr Donald Armstrong AM, one of the inaugural MTAA Super Board Directors and representatives from MTAA Super’s long standing partnerships joined staff and the current Board in celebrating this historic milestone. MTAA Super was established in 1989 and was among the first funds to offer members’ investment choice - delivering a strong historical return of 7.5% per annum over 25 years. MTAA Super CEO, Leeanne Turner, attributed the fund’s growth and success to an ethos of innovation in responding to members’ needs, and a strong and instinctive alignment to the automotive industry. “It is critical that we support and promote our industry as it undergoes major changes, both the difficult changes that have come with the winding down of car manufacturing in Australia, as well as the positive opportunities that exist in an industry that is being transformed by technology and innovation,” said Ms Turner. “We can all be proud of what we have achieved not just in the last few years, but for a quarter of a century for our members, employers and the industry.”

32 SUPERTALK - December 2014

MTAA Super Chair John Brumby and CEO Leeanne Turner cutting the 25 year anniversary cake

AIST’S FLAGSHIP EDUCATION OFFERING

Trustee Director Course Designed in consultation with leading superannuation experts, this program will provide directors with the skills, knowledge and confidence to immediately improve their performance at board level and become more dynamic contributors. Why the TDC ticks all the boxes: “This course recognises the unique skills and heavy responsibilities required of today’s trustee directors – it should be on every trustee’s radar.”

“Trustee directors need to be armed with their own knowledge, not just go through the motions, so courses like this are invaluable to equip them for their role.”

`` John Brumby – Chair, MTAA Super

`` Pam McAlister – Partner, Hall & Wilcox

“All directors and all chairs should make sure that even existing directors have a taste of what’s in this course. I will be doing that for my own directors on our board.“ `` David Galbally AM QC – Chair, TWUSUPER

“Boards are full of people with great technical skills, but they seem to lack the soft skills … the ability to think independently but act collegiately; the ability to probe and question without rancour; and the ability to objectively listen to another’s point of view. This is where the course excels.” `` Sandy Grant – Chair, CareSuper “The course is relevant, very comprehensive and addresses not only investments but also the governance requirements and finance, which is historically an area that has been under-done.” `` David Coogan – Partner, PwC “The industry has changed so much, it’s important that we stay contemporary and really take the responsibility and personal accountability to make sure that we do have the professional training required to fulfil our proper duty.”

What recent TDC graduates have to say: “This course is just amazing; it covers all facets, from both the strategic, down to the regulatory. I will be going back to my policy committee and nominating that we should do this as a minimum standard.” `` Cathy Doyle – Graduate 2013 Head of Human Resources, BNP Paribas (Aust/NZ) “It’s been incredible gaining access to some of the great minds in the industry through the course – a rare opportunity.” `` Julie Bignell – Graduate 2013 Trustee Director, CareSuper

“The facilitators are all seasoned experts who give generously of their time and skill ensuring that the learning objectives are fully met. Be prepared to be worked hard and you will be well-rewarded.” `` Keith Harvey – Graduate 2013 Alternate Trustee Director, CareSuper

`` Jay Bonnington – Trustee Director, HESTA

Visit our website for more information or contact Meegan George on 03 8677 3800 or training@aist.asn.au

Australian Institute of Superannuation Trustees Ground Floor, 215 Spring Street Melbourne VIC 3000 T +61 3 8677 3800 F +61 3 8677 3801 info@aist.asn.au www.aist.asn.au