On the shoulders of giants
Monday, 15 March 2010 1:00pm
By Michelle Baltazar | In Superannuation
Today's generation of super trustees are reaping the fruits of the Labor movement that started modern super decades ago - now it's their turn to give something back by solving the next set of challenges involving superannuation adequacy, scale and fees.
Speaking at the opening session of this year's Conference of Major Super Funds (CMSF) in Brisbane, Paul Howes, the national secretary of the Australian Workers Union (AWU) and trustee director at AustralianSuper, shared his views on where the industry should be heading in the next 20 years.
He's got big shoes to fill, speaking at the 20th anniversary of CMSF, two decades since Paul Keating who was treasurer at the time spoke at the inaugural event.
Like his predecessor, Howes said that the industry must do more to deal with the adequacy of super in retirement, calling for SG to go up to 15 per cent, despite Treasury estimates that the current 9 per cent SG contribution is ‘adequate'.
"Super adequacy is not just a question for those reaching retirement age in five to ten years," he said, adding that there's not enough community discussion on the adequacy of super for the next two generations of retirees and key segments of the population such as women and indigenous communities.
Howes admits that given the global financial crisis, it would be unrealistic to push for 15 per cent SG today through tax cuts but there are other ways: more employer contributions, better incentives or new government rules.
He also said that ‘scale' is a serious issue, arguing that only mega funds can deliver optimal value for members and further consolidation is inevitable.
Drawing on his second hat as trustee director of one of the largest superfunds in the country, Howes said that consolidation can help trustees drive down fees, delivering better retirement savings for their members.
But Howes admits that the discussion around merging funds together is not an easy task.
Finally, one of the challenges for today's trustees is to deal with succession planning, calling on the attendees to recruit the best talent.
"We have to find good people who are committed to our values. Many of those people will be targeted by the for-profit sector as well, with lucrative offers, so our sector needs to find innovative ways to find and retain them."
Fiona Reynolds, AIST chief executive, agreed with Howes about the new challenges facing an industry growing to $3 trillion by 2020.
"After more than 20 years, super is now firmly in the spotlight. The level of scrutiny we are facing now i just the beginning."
This story was found at: http://www.financialstandard.com.au/news/view/28289
Printed: Thursday, 9 February 2012 12:12am