Never has there been a more appropriate time to fix Australia’s antiquated superannuation system.
The COVID-19 crisis has thrown the spotlight on many of our institutions, but none more so than our super funds.
They opposed the early release of workers’ money when they’ve had early access to our money for years.
Super is simply not doing what it was designed to do.
Paul Keating’s love child with the union movement sees 70 per cent of Australians continuing to rely on some form of pension. And that figure won’t change between now and 2050.
The system is clearly being manipulated by vested interests, and the layers of largesse are simply staggering.
Take super fund boards – they are big, bloated and expensive.
Cbus and First State Super each have 15 directors. AustralianSuper, HESTA and NGS Super are all just one behind 14.
Meanwhile, Coles and QBE have almost half — eight directors — while CommBank, ANZ and Woolworths have just nine.
Why is it that ‘not-for-profit’ super funds require almost twice as many directors as the ASX’s largest and most complex companies? Simply because it means more snouts in the super trough.
Many of these unions are paid hundreds of thousands of dollars of your money for a part-time job for their staff.
It’s yet another example of how super is working for vested interests rather than the national interest.
Unfortunately, however, the problems don’t stop there. Super fund boards are not just big and expensive, but ineffective.
This is because they’re stagnant.
Any skilled director will tell you that board renewal is a constant focus. New directors bring new ideas, new skills and more objectivity.
As a result, APRA believes the tenure of super fund directors should not exceed 12 years. Any longer and their ability to exercise independent judgment is affected, the prudential regulator says.
But why let tenure suggestions get in the way of a substantial salary? The industry is riddled with people who have as much regard for maximum tenures as they do for the workers they represent.
Leading the incumbents is Neville Pozzi, who has been a director of REI Super’s Trustee company for 27 years.
He is closely followed by Paul Conway. He has been on the board of the Meat Industry Employees’ Super Fund for 25 years, despite the fund’s own ‘Board Renewal Policy’ suggesting a maximum of 12 years.