As he readies to step down after more than a decade at the helm, REST Industry Super chief executive Damian Hill is confident he leaves the fund more resilient for the next global financial crisis.
Hill wrote to REST members on Friday, June 23, 2017, to inform them that he had advised the board he would not seek a renewal of his employment contract when it expires in January 2018.
Competition for the top job at the fund, which is one of the largest in the country with 2 million members and $45 billion in funds under management, is expected to be fierce. REST chair Ken Marshman praised Hill and said the board plans to engage an executive search firm to review both internal and external candidates.
“Damian leaves REST in a very strong position for the future, and we sincerely thank him for his contribution and leadership,” Marshman said in a media statement released on Friday evening. “In typical fashion, he has provided the fund with ample notice in order to ensure a seamless transition.”
Hill joined REST from Sunsuper as administration manager in 1999. He was appointed chief executive in 2006, following the retirement of his predecessor, Neil Cochrane.
“When I leave in January, I will have been at the fund for 19 years, with the last 11 years as [chief executive], so I feel it is a good time to go. There is a great team in place scoring a lot of runs. I have more confidence in the team than ever before,” Hill told Investment Magazine. “And on the personal side, I will be 51 years old then, so it is a good time to look for the next challenge in my career.”
Hill said he “doesn’t have anything lined up” and confirmed he is seeking another senior executive role.
“I’ll be looking for another executive position, which may be in super or maybe not. At this stage, I am keeping my options open.”
Shaped by the GFC
When asked to nominate a highlight and a lowlight from his tenure as chief executive, Hill revealed that the global financial crisis was the worst of times but also the catalyst for some of his proudest achievements.
“I hadn’t been in the role very long when the GFC hit, so obviously going into that was a lowlight, but from a relative point of view, REST performed better than anyone through that period so leading the fund through the other side of the GFC turned into a bit of a highlight.”
The most confronting aspect of being chief executive during the GFC and its immediate aftermath was having to speak to members of retirement age whose savings had been hard hit.
“In their minds, people had banked the good returns of the preceding years and not realised they weren’t baked in,” Hill said. “Many members who had just retired suddenly realised the plans they had laid out weren’t going to be possible and we also had a lot of members who had to delay their retirement plans.”
Hill said it was “difficult but important” to “front-up” to member forums and “face the music” to help explain the predicament and educate people about their choices.
“It is in the bad times you really need to be on the front foot with member communications.”
Hill is confident that in 2017 the industry super fund for retail workers is in a much better position to help its members weather another global financial crisis, should one occur, than it was a decade ago.
“We are no better today at picking when these things might happen, but REST today is more resilient,” he said. “In terms of the investment portfolio, we have reduced our exposure to equities and done a lot of work to diversify into unlisted assets. We are also better placed on the member engagement and communications side.”
Investing in technology
High on Hill’s to-do list for his final six months in the role will be getting the ball rolling on a major investment in technology to improve the fund’s insurance claims handing. The fund has recently finalised its budget for the 2018 financial year, which includes a commitment to the project, he said.
“We have already done a lot of work on improving our insurance claims handling processes, which has got the average claims cycle down by over a month. Now we are ready to make a significant investment in technology to improve that further,” Hill explained. “It is an area where the industry as a whole has under-invested.”
REST Industry Super’s members are typically young, low-income workers with small balances. This demographic cohort is a focus of both the Parliamentary Joint Inquiry’s review of group insurance and the Insurance in Superannuation Industry Working Group.