Australian Institute of Superannuation Trustees (AIST) boss Tom Garcia has resigned from leading the lobby group for non-profit super funds to join AustralianSuper, the country’s biggest industry fund, as head of product.
AIST announced the chief executive’s impending departure on Friday December 16, 2016. Garcia will stand down from March 2017.
No successor has been named to take over from Garcia. AIST chair David Smith said the recruitment process for a new chief executive would begin immediately.
“Tom has been a passionate advocate for not-for-profit funds and their members through a period of significant policy and implementation challenges, as well as technological disruption,” Smith said.
“During Tom’s four year tenure, AIST has thrived as an active and highly respected industry association with impact on super and retirement income policy, trustee and fund staff education and professional industry standards.”
The chief executive’s resignation was announced without a succession plan in place. However the more than three month notice period provides ample time for a handover.
Focus on retirement products
At AustralianSuper Garcia will fill a role that has been vacant since former head of product Andrew Baker left the fund in June 2016 to take up a new position as chief member experience officer at QSuper.
The statement released by AIST said that in his new role Garcia will “drive the product innovation agenda” at AustralianSuper, which has more than $100 billion in funds under management.
It is expected that much of Garcia’s focus in the new role will be on the development of an emerging class of comprehensive income products for retirement (CIPRs).
His appointment to AustralianSuper was revealed the day after the government released a blueprint for consultation on the slated introduction of new laws to force all super funds to “soft default” all retiring members into a CIPR, which would function as an account-based private pension.
This included the proposed rebadging of CIPRs to “MyRetirement” products, which the government suggested would be “a more consumer-friendly and meaningful name”.
In December 2015, the Turnbull Government said it would accept a recommendation of the 2014 Financial System Inquiry (led by former Commonwealth Bank boss David Murray) to force all super funds to offer retiring MySuper members CIPRs as an alternative to a lump-sum payout.
Figuring out the best way to design and market these products is set to be one of the biggest challenges facing the industry in the years ahead.
Demand for retirement income solutions is set to boom as the baby boomer generation transitions to retirement and the country’s 25 year old compulsory super system approaches maturity.
Looking to the future
Prior to being appointed AIST chief executive Garcia was policy and regulation manager for the organisation. He previously worked in financial advice, having begun his career as an engineer.
No doubt his deep networks in the $2.1 trillion sector and with policy-makers will be an asset to AustralianSuper. However, his background may also prove a point of friction. As head of AIST Garcia has been an attack dog for the union-aligned industry funds in their battle against the government’s push to force them to handover one third of their board seats to independent directors.
“I feel honoured to have been given the wonderful opportunity to lead AIST and work with the AIST board and staff. It is a fantastic organisation with many passionate and dedicated members and I look forward to seeing AIST grow from strength to strength in the future,” Garcia said.
“The profit-for-member super industry is one of the most exciting and innovative areas to work in and I look forward to continuing my association with the sector through my new appointment at AustralianSuper.”
Garcia is a highly-regarded figure among AIST’s stakeholders in the non-profit super sector.
News of the changing of the guard at AIST comes less than a year since rival super fund peak body the Association of Superannuation Funds of Australia announced the retirement of its long-serving chief executive Pauline Vamos. Her replacement Martin Fahy was named in September 2016 and commenced in the role on November 1, 2016. ASFA is an overarching lobby group for super funds from both the retail and non-profit sectors.