A ‘risk factor reserve’ or margin of an additional 10 per cent also appeared for the first time. The chief executive of MTANSW, James McCall, has said that this margin was a way of paying back the original equity providers of MTAA Ltd – the state associations – for their subsidisation of the fund in its early years. MTA-NSW withdrew from MTAA Ltd late last year, concerned that most of its 30- plus staff were dedicated solely or partly to superannuation matters, and that the original purpose of MTAA Ltd – a voice in Canberra for the motor trades – had been swamped. MTAA Super had received its Registrable Superannuation Entity (RSE) licence in early 2006, but APRA had remained interested in the fund’s unique structure. APRA had raised concerns dating back to 2004 in respect of the organisational structure of the Trustee, the potential for conflicts of interest to arise within that structure and other corporate governance issues including the multiple roles of Delaney.

Another matter of concern to APRA was said to be the arrangement whereby MTAA Ltd provided secretarial services to the Trustee in circumstances where MTAA Ltd also controlled the appointment of half of the directors of the Trustee. The regulator had also requested documents from the fund’s then-chairman of 10 years, John Rickus, which became the subject of those legal proceedings, the details of which will be well known to most readers of Investment Magazine (those wishing to catch up can access the Archive for this magazine and I&T News through www. investmenttechnology.com.au). Then came the global financial crisis, which at first further cemented MTAA Super’s performance supremacy – in 2007 it held far less of the ravaged listed equity and bond asset classes than any other fund, with the exception of its fellow clients of Access Capital Advisers. Inevitably, however, the unlisted markets had some catching up to do.

Performance had been stabilising since that 25 per cent default option loss, although it suffered a setback last month when the fund informed members that revised “valuation information” had just been received for the October 2009-February 2010 period. The revisions shaved over 0.3 per cent per month from what balanced fund members thought they had, while investors in the unlisted ‘target return’ portfolio were more than 0.5 per cent per month worse off. As said before, there are few who doubt that MTAA Super can outperform again. And with the recent severing of the services agreement with MTAA Ltd, the fund appears to be bringing itself into line with its fellow regulated super funds, in that the trustee will directly employ its own staff. The transfer promises to lay to rest most of the issues outlined earlier, although it is being watched closely. For one, MTAA Ltd is the owner of the MTAA Super trustee company.

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