Gary Clifford is taking time out from a road trip when he takes Investment Magazine’s call. Surrounded by karri trees as tall as 90 metres in the Valley of the Giants near Walpole in Western Australia, he’s a man who favours raw simplicity.
Clifford sits on the board of the Fire and Emergency Services Super Fund (formerly the Western Australia Fire Brigade Super Fund) and has been involved in its operation for 20 years. He was a fire fighter for 34 years before he retired a couple of years ago and in March, Australian Institute of Superannuation Trustees honoured his work in super by awarding him Trustee of the Year.
The extent to which he is invested in his members makes it quickly clear why he won: not only is he driven by a desire to invest in the community he’s worked in, he’s also retired and knows its challenges.
“If I had to put a label on myself, I’m a small-picture man. I work on the basis of looking after the individual member, being mindful of concerns of individual members because I worked among them. I understand the people I’m around, I’ve been one of them and I am one of them.”
We look after our own
It’s the fire fighter ethos that underlies his work, where taking care of each other is “part of the job”.
“I guess it’s like the military. We look after our own and it carries over into the way we also handle our super and we’re very protective,” says Clifford.
“A couple of times in the past, we’ve had particular political parties or governments at the time try and take us over. And our response has always been, hey, this is ours, we will look after it, we don’t want to be taken over by someone who doesn’t even understand what we are.”
Clifford says the board doesn’t want a “call-centre situation” for members.
“The board wants our member to be able to pick up the phone and call our office and talk to someone – no automation or anything like this.”
Consequently, Clifford, along with other board members, takes personal calls from members who have concerns about their super or, more particularly, their insurance cover.
“What I strive to do when I speak to the members, and I’ll speak to them – they’ll phone me and want to talk about different issues – I like to express it so that it’s in every day language, not the jargon we get in the industry.
“I don’t think people in this industry realise how complex super is to ordinary people, for the disengagement. It’s so complex, most of it is government interference and… they’ve made super so complicated that people in our fund, I guess half of our board is elected, they put us there, they do trust us.”
It goes some way to explaining the loyalty of the fund’s members. Clifford says the fund retains between 80 and 85 per cent upon retirement.
Board line up
It’s a relatively small fund, representing approximately 1800 members drawn from a few bodies, including State Emergency Services and the Bushfires Board, the dominant side of which are active fire fighters.
It’s no surprise then that he’s passionate about working in a fund that supports an industry in which he’s been so heavily involved. He was also a part of the Union Committee of Management for about 20 years in a voluntary capacity.
“Our super board has always been very important to us. We have a very good super fund, so I got involved with that. A couple of my mates were on the board from the elected side. Again, it was unpaid and in my own time.”
The board is chaired by actuary Dennis Barton, who has held the position for two years, following on Harry Kuhaupt, who sat as chair for 25 years. Clifford sings the praises of both.
The board consists of six members, three of whom are appointed by the employer, and three elected by the members on staggered three-year terms.
“That’s not the industrial body, I want to be fairly clear on that. There’s this attitude sometimes about industry funds – we’re not an industry fund – but there’s an attitude out there that the industrial body puts up the elected side. They don’t, our members actually elect us. It’s completely separate, autonomous from the industrial body.”
It’s an important distinction for Clifford because it’s tied in with the board’s successful operation, which he says has infrequent turnover.
“Our own board works so well because we never play a particular side; the six of us work as a team, they always have. And it’s a very good system as long as the bodies that represent that are on that board don’t take sides, don’t play a particular card.”
Conservative without being stodgy
On equal representation, Clifford says it would be good to have more specialised members on the board as independents, but he cites cost as an issue.
“One potential appointed director looked at what we paid our appointed directors and said no, not enough money.”
It’s a no-frills operation for the $450-million to $470-million fund, which Clifford says bounded ahead after being stalled by the global financial crisis. “We reached $300 million a few years back and then got belted by the GFC,” he says.
Clifford says the fund is “conservative without being stodgy”, and is increasingly investing in direct property in order to achieve greater consistency and to decrease volatility.
“We’ve had direct property for quite some time, but we’re getting into more because the volatility of these days is such that… we need to actually almost have absolute returns in some sections to make sure we can meet our accrual rates and our vested benefits.”
While it’s a small fund, Clifford says it has always been ahead of the game in delivering better services to members.
“We introduced allocated pensions long before they became the flavour of the month, we had rollovers,” he says, adding that there are no entry and exit fees, or a fee to be in an account-based pension.
Clifford is well versed in the minutiae of running a fund, though he expresses some frustration that regulations are interfering. “When it comes to governance, we believe in it, we see the reasons for it and accept and comply with it. It takes up so much time now, particularly in the last couple of years, that firstly it impacts the bottom line for our members, and our members are our major concern.
“And second, in many cases, we were already doing what has now been mandated because it made good sense; it was just good policy. Now we’re that busy ticking boxes to show that we’ve done what we always did. It soaks up a lot of energy and a lot of time.”
For Clifford, the board is always responsible and accountable.
“You can delegate some things, you can’t delegate others. Also, we’re a defined benefit fund, a hybrid, and defined benefit is hard work these days.”