The one certainty about superannuation over the next 20 years is that it will grow. It’s the miracle of compound interest plus a legislated minimum of the flow of foregone wages every week. The structure of the industry, either through evolution or new regulation, is a little more difficult to predict. There will be fewer but larger funds, perhaps even more SMSFs [when will they stop growing in number?] and perhaps fewer managers. The influence of sponsoring organisations, such as unions and employer bodies, may wane – with or without possible legislative change to the make-up of trustee boards – with the sheer size of funds and continued push for professionalism and best practice. Adequacy will have been addressed, or at least debated. Paul Howes, one of the industry’s new faces of the past couple of years, says that super adequacy will be the next big discussion.
“We haven’t really had the debate,” says the 28-year-old national secretary of the 124-yearold Australian Workers’ Union, and trustee director of AustralianSuper. “It was relatively easy to organise a wage trade-off before but you can’t do that any more because we don’t have a centralised system. Twenty-two years ago you could take a proposition to the ACTU. Even individual unions can’t do it any more.” However, Howes says that the union movement is united behind a push for greater superannuation guarantee [SG] contributions. “I’d be very surprised if any union opposed it,” he says. Howes is an interesting figure in the superannuation industry. He is almost a throwback to days gone by.
After a tough childhood he left school in Year 9, got a job as a clerk in an insurance company and soon found himself organising his colleagues for improved conditions. He caught the eye of what is now Unions NSW and was fast-tracked for senior union management. Married with two children and a third on the way, a tertiary education has so far seemed a luxury he cannot yet afford. He says that given the demographics of the nation, super is even more relevant today than it was 20 years ago. “If the average life expectancy gets to 100, then it’s going to put enormous strains on the country’s savings,” he says. While he holds fairly traditional trade unionist views on wanting to see increased investment in Australia, rather than offshore, and on infrastructure in particular, Howes sounds like a thoroughly modern trustee: “It would be very dangerous to force super funds to look at anything which didn’t have the aim of maximising returns.