The superannuation industry has to bed down the raft of regulatory reforms, says Elana Rubin, former chair of AustralianSuper.
“I appreciate that government undertakes regulatory reform with the very best intentions, but from a member perspective, it can often reduce confidence in the system. And while it may not affect them directly, they read about all these changes in the system and they worry about what it will mean for the money that they have there for the next 30 to 40 years.”
Rubin said the industry has to approach future regulatory change in a cautious and measured manner.
“We need to work collectively in a bipartite way to make sure that future changes are absolutely necessary, are measured, are communicated well and don’t impact negatively on the community’s confidence in the superannuation system.”
Rubin recently sat on the federal government’s consultation group for the proposed super charter and super council with Jeremy Cooper.
“I congratulate the then-minister for pursuing the proposal… For me, superannuation is one of the most important social and economic reforms of the last 30 years. It is a long-term policy framework.
“Working on the Super Charter report gave me the opportunity to reiterate that long-term policy framework and to recommend a process to better achieve the objectives of the system and protect the system from day-to-day political noise.”
Rubin advocated bipartite, stable, long-term policy in superannuation, adding that it’s important to have a framework that addresses the issue of adequacy, in particular for low-wage earners or people in and out of the workforce, “and where we continue to innovate and develop product”.
“And as an industry, we really need to work together to crack the optimal retirement product and how to address longevity risk.”
In relation to gaps in the post-retirement product space, Rubin said the superannuation guarantee system is still relatively immature.
“It’s not even 30 years. We don’t yet have the first group of people retiring who have been in the system throughout all their working lives. Notwithstanding, it is not yet a mature system; we need to have much more focus on the post-accumulation period than we have in the past.”
Reflections on AustralianSuper
Rubin chaired Australia’s largest super fund, AustralianSuper, from 2007 until early 2013, and was with the fund since its inception in 2006. She was on the board of Australian Retirement Fund, one of the funds merging into AustralianSuper at the time.
“There were a number of clear objectives underpinning the merger, including improved services and products, economies of scale and a competitive brand.”
Rubin said AustralianSuper managed the merger process successfully.
“Merging organisations isn’t easy and achieving the key objectives that you set at the beginning is often fraught. In AustralianSuper’s case, it has clearly delivered for members in terms of improved services, increased products, strong returns and a respected brand.
“And indeed, you can see the validation of that initial merger in the subsequent mergers and the growth of the fund since that time.”
AustralianSuper has merged with a number of large and small funds, including Westscheme and IBM.
“I believe to deliver quality services and products and strong investment performance at a low cost requires scale. The regulatory environment is also becoming more onerous for smaller funds or ones with fewer resources,” she said, noting that while she’s a believer in scale, scale in itself isn’t the answer.
“Scale gives you a platform for delivering all the things that you want to do for members, but you’ve actually got to work hard, it doesn’t come automatically.”
Rubin’s term as chair of AustralianSuper ended this year, and she felt it was the right time to leave.
“AustralianSuper is a great fund, but every organisation need turnover and change to keep it innovative and dynamic, so I felt it was the right time. And I was particularly happy to be able to hand over the chair to Heather Ridout.”
Rubin has moved into a role as non-executive director of NAB Wealth MLC. She said the attraction was the broad range of its activities – superannuation, insurance, administration, funds management, advice and more – and that it is an organisation she respected for its values and culture.