After speaking with numerous industry sources, $750,000 was the highest figure heard of for a chiefinvestment officer in Australian superannuation. While certainly not small beer, people with the talent to run $20 billion-plus could arguably use their skills to more lucrative ends in private funds management or in overseas pension funds.In a globalised employment market, Australian superannuation funds are competing with the rest of the world for the top investment professionals, and ourability to attract them with remuneration alone is seriously lagging some of our overseas counterparts. For example, Canada’s The Globe and Mail recently revealed in a plainly titled article: “Who made what at the country’s big pension funds”, that in 2007 the $C108 billion Ontario Teachers’ Pension Plan paid it’s then-chief executive officer, Claude Lamoureux, and its chief investment officer, Bob Bertram, C$4.9million. Each.
Alan Mackay, a consultant in the Hong Kong office of Darwin,Rhodes, an executive search firm, says that the salary range for those running,pension funds in Asia is around $500,000 with bonuses on top of that. In the UK,it is about 15 per cent higher again, he says. Recruiters are concerned that if remuneration packages in Australia do not improve, super funds may struggle to,attract and retain the kind of professionals required to invest the nation’s retirement savings. “We are definitely exporting superannuation talent offshore, there is no question there,” Tom Hancock, director at Thomas Hancock Associates, a local recruiting firm, says. “You can see this in the fund-of-funds area, where particularly the UK is looking to leap ahead. [The UK] requires people with the technical knowledge of how you run platforms and so forth; that’s been going for at least five years now.”
In addition to losses from the flight of human capital,recruiters are predicting there will be less people around that are able to run a super fund as the industry continues to consolidate. “With the amalgamation of super funds, there have been some spare, if you can call them that, CEOs about,” Hancock says. “Because of the broadness of the skills required, funds have tended to recruit from one another. We have seen people move between funds, from smaller funds to bigger funds, but that’s not going to last. “One of the biggest issues I see looking forward is: where are the next CEOs going to come from? Super funds don’t tend to train up their number twos. Many of the current CEOs are reaching retirement age, and at most funds there doesn’t seem to be a succession plan in place.