Superannuation needs to set itself a new grand ambition as we march towards the third decade of compulsory superannuation, if it is to match the trust placed in the system by parliament – and, by extension, the people of Australia.
To date, the industry has failed to articulate a grand ambition, to spell out clearly what a thriving future looks like, and to define what sort of relationship should exist between it, its members, and the broader community.
Super as it stands
That’s not to say that super isn’t already playing a significant role in our nation’s prosperity.
Last financial year alone, $61 billion was paid in super benefits to Australians – an astonishing figure, given that just over 20 years ago, the sector as we know it today didn’t exist.
Super funds have deployed billions of dollars of members’ money in infrastructure projects and property investments across the country and overseas. The $2 trillion currently in the system also helps to underpin the stability of the national economy as we navigate stormy global economic waters.
These are great achievements, but financial services – including the super sector – is still not operating at an optimal level.
Two crucial elements underpin the Australian super system. It’s effectively universal – almost every employee takes part, no matter who they are or where they work; and most contributors receive tax concessions, an incentive from the public purse to save now for the future.
These factors confer considerable privilege on the superannuation industry, and mean it has a greater responsibility to act always in its members’ best interests – that is the least that should be expected, given it has the privilege of managing two trillion dollars worth of the hopes and dreams of working Australians.
Only a few years ago, governments globally had to spend trillions of dollars of taxpayer money to fix problems of the financial services industry’s own creation. As a result, the industry relinquished growth, prosperity, and – most damagingly – trust.
And there is no greater trust than placing your very future in someone else’s hands, as we ask super fund members to do.
Aiming to deliver
Super’s grand ambition should be straightforward. It is a key pillar for all Australians in the journey of wealth generation. There are only a few simple things that members need to do to create and maintain a future income and we must help as many members as possible on the path to a comfortable level of income in retirement.
When we are delivering for working Australians and they trust us and believe us, we will have landed. Along the way, we will have delivered better environmental, social and governance outcomes.
We will have changed the culture of the industry and the broader business community, so as much effort is expended researching and helping people through their retirement years as it is on the early childhood years.
This will help millions of Australians and the national economy with benefits that last for generations, and we will have conquered the other great challenge faced by the industry – ensuring super fund members have absolute trust and faith in the super system, and the people and organisations who operate it.
We can’t afford to fail
But if we fail to deliver, the consequences are dire. Australians will feel uncertain about their futures, and confidence will wane – a lamentable outcome, given that our industry was created explicitly to help alleviate worry for working Australians.
Success will require a material change in our culture, because mere words won’t do. We’ve already turned good words into clichés – words like integrity, sustainability, and responsibility.
In an environment where some corporates spin, lie, and deceive, the task for super funds is to gain, and then maintain, their members’ trust.
Each person has different personal concerns, but ultimately what they want is confidence in us, in the broader system and most importantly in their own financial futures.
Providing that confidence and trust is a responsibility we should embrace and adopt as a benchmark of equal standing with financial performance.
Achieving success in business is a cornerstone of our economy and our society, but somewhere along the line, the definition of success in the financial services industry went astray for many.
What we do isn’t just about money. Neither is it just about profit, or size, or the number of members we have. It’s about people. It’s about their success, not ours.
Success involves two things – our members having the best opportunity to create comfortable lives for themselves, and their absolute confidence in the industry.
We must realign our industry so that it’s made up of more and more people who – rather than serve themselves – are proud to serve Australians, and grow Australia.
We need:
- Policies that will generate 12 per cent superannuation savings from the average wage
- Policies that compensate for broken work patterns, which are a huge disadvantage for women
- Policies that encourage people to save for the long term.
These three actions – when underpinned by confidence and trust – would create a thriving financial future and set millions of Australians on the path to a happy future.
We need to commit ourselves to these goals – because thriving futures require grand ambitions.
Ian Silk is the chief executive of AustralianSuper, Australia’s largest superannuation fund with more than $95 billion of members’ assets under management.
