Anne-Marie Corboy, chair of Australia’s largest corporate superannuation fund, talks to Investment Magazine about sustainability, the Retirement Income Review and the urgent need for policies that help disadvantaged women.
Q |With 30 years’ experience as a director and chair and a former chief executive of HESTA, what policies do you think Canberra should put in place to improve the retirement outcomes for women who are disadvantaged?
A |Women in Super have very sound policies in this area which they have been advocating for some time – and which I strongly support – including an increase in the superannuation guarantee, abolishing the $450 threshold and paying superannuation on parental leave. A further important issue being discussed more is the taper rate for access to the Age Pension, just another policy decision which has a major impact on women. This policy needs more discussion and reform. I would also like to see intra-fund advice expanded so that access to the Age Pension can form part of the advice in relation to superannuation balances.
One of the biggest impacts will be to close the gender-wage gap and change societal gender expectations in relation to leadership, wages in highly-feminised industries and caring responsibilities.
All of these things combined will make a huge difference and change the statistics that 40 per cent of older single women live in poverty and the fastest growing cohort of the homeless is single older women.
Q |How important is the Retirement Income Review? Do you think it will reveal much and do you expect government to follow up with further action?
A |The Retirement Income Review will play an important role in future policy development and debate if it is, in fact, documenting the actual situation. Often reviews can be quite skewed in how they report outcomes and if this led to further skewed policy it will not provide the optimum outcome across the current and future retirement community.
Q |Does the superannuation system need a tweak? Or, does it need wholesale change?
A |I think it is absolutely true that if we were designing the superannuation system today, we would do it a little differently but why would you scrap a world-leading system rather than address the deficiencies? I would argue that for the average worker super is not complex – at the times when decisions need to be made intra-fund advice covers many of these situations. There is more complexity at retirement, but this could also be reduced with a strong will to do it and the ability to source advice at an accessible level that can be paid for from the member’s account.
One of the most important tweaks is to distribute tax concessions more equitably.
Q |What is the most important conversation you’ll have around the board table this year?
A |The most important conversation is ‘are we providing the best outcomes for our members’? At TelstraSuper we have a much bigger cohort of higher balance members compared to other funds, so retirement income settings are very important. We also want to do the most that we can to boost our members’ balances – information and advice are important factors. TelstraSuper has a very highly regarded advice service so we need to see how we leverage off this for the benefit of all members. As a self-administered fund, it is also important that we continue to improve our back-office processes, and enable our people to focus on our members’ needs. The technology used by funds like ours is complex and undergoing considerable change. We need to navigate that change and try to simplify as much as possible the systems and processes that underpin our fund’s operations. This goes to productivity, risk and member service as well.
The other area of importance will be an increase in our sustainability efforts both within the fund and across our investment portfolio.
All boards will be discussing the importance of data security and rigorous processes to deter cyber attacks.
Q |What is your commitment to sustainable investing and how does this translate in a practical way to your fund?
A |I think TelstraSuper has been a bit under the radar when it comes sustainability. We have had relevant policies within our investment portfolio for some time but this year we are reviewing and enhancing our work in this area. We have recently joined Climate Action 100+ and will become full members of ACSI from July. We are also joining the Investor Group on Climate Change. Our internal approach to sustainability is also being reviewed which will be very much enhanced when we move to our new offices in a few months.
Q |How will APRA’s member outcomes reforms shape the industry and member outcomes?
A |Hopefully, the aims of this project will be achieved, and we will see improved member outcomes. The downside will be if it drives a herd mentality which will mean that funds may not be encouraged to take their members’ specific needs into account so that they can compare favourably with other funds. I am optimistic that, together with the necessary enhancements that need to be made to the heat maps, the system overall will benefit members. While we always had member outcome metrics and monitored these metrics, the APRA process around member outcomes has caused us to thoroughly review and, in some cases, reset outcomes objectives and set interim targets for these objectives. This is a good thing for funds and members alike.
Q |How does regulatory scrutiny of trustees impact boards? What will be their response in terms of establishing the organisational risk appetite, mapping and controls of their fund?
A |I think most well managed funds will have already undertaken the tasks referred to. I have always approached regulatory change in a pragmatic way – often it is directed at the poorer performing parts of the system. Look at the change required, how will it impact your particular processes and what do you need to do to meet the change. Many times, this requires industry advocacy to prevent unintended outcomes or where inequity is obvious, which I absolutely support, but in general you need to ignore the noise that goes on in some quarters about the whole world being turned upside down.
Q |The post-retirement phase of a member’s life is increasingly taking centre stage. Where are you in this space?
A |We have many members with higher account balances and a highly regarded, quality comprehensive advice function. The highest ratings we receive from our members is from this group. Last year we commenced paying out the capital gains tax to members who transferred into retirement phase {we’ve paid out over $2 million to members already} and we have just about finalised a retirement portal which will provide a range of services to members as they approach, or are in, retirement. There is more to do for members in the retirement phase and our plans for next financial year include a number of further enhancements, for example, by providing specific investment product offerings to retired members.
Q |How would you describe your leadership style?
A |I think my leadership style is inclusive and collaborative with the aim of reaching consensus but I can also be decisive and am able to make hard decisions after considering all the information. Staying true to your values and being honest and empathetic is very important.
Q |What are the most pressing governance issues?
A |There are changing community expectations on directors and boards and I think staying across these is important. In our case we only have one goal – to enable our members to have a financially sustainable retirement experience and all that we do from a governance perspective goes towards this.
Q |How important is scale in the industry? What will the landscape look like in five years?
A |Scale plays an important role in spreading costs across a wider membership or funds under management base. I think you can be too small, but I think the jury is out on whether you can be too big. For example, a smaller fund by member numbers and with low average balances will find it very hard to survive. But a sophisticated fund with either a large membership or high average balances will have the scale to deliver what is necessary for its membership.
Q |The industry is facing a raft of changes. Does that mean boards will look for different skill sets in their top executives? What are those skills?
A |I think the skill sets required in top executives has been changing for some time and this applies to all industries. You will always need technical experts depending on where your organisation happens to be at a particular point in time, but executives also need to lead so the array of people skills – collaboration, respect, listening, valuing all points of view – are all important. Exceptional leaders are those that know their subject matter and can take the team with them to fulfil the vision of the organisation.
