Cyberattacks and geopolitics are both outside super’s traditional bailiwick, but funds will have to come to grips with them to do their best for members in a world marked by more volatility and uncertainty.
CFA Institute president and CEO Marg Franklin and institute chair Marshall Bailey shared their views on geopolitics, AI and private markets at last month’s CFA Society Australia Investment Leader Forum in Sydney. They also reflected on the association’s COVID-19 experience, which revealed major risks and shortfalls in its value and service proposition, leading to radical changes.
Australian Retirement Trust, Rest, Hostplus, AustralianSuper and Insignia were hit by a large and co-ordinated cyberattack last Friday that compromised thousands of accounts and led to some members losing retirement savings. The criminal activity follows multiple warnings to the $4 trillion sector from regulators and experts.
The impact investing sector needs institutional capital if it is to tackle society’s environmental and social challenges. But super funds are looking for more.
The $16 billion Future Group punches above its weight when it comes to forming public opinion and shaping policy on sustainability and ESG issues. Chief investment officer Ed Tomlinson says a trust-based team approach and an ongoing commitment to allowing employees to work from home help it to foster the values it needs to be effective.
ASIC chair Joe Longo says that super trustees ignored “years of warnings” on service standards and failed to invest in systems for supervision of outsourced administrators. But elsewhere, his preference is for less regulation, not more.
In the aftermath of its bombshell report into death benefit claims handling, the corporate regulator says that it will “hold feet to the fire” to ensure members get a better outcome. But with service standards already lifting, it may not have to.
A growing number of asset managers have fled collective action on tackling climate change, but many asset owners remain committed to climate-related targets and as they grow in size and influence they will inevitably become more selective in the managers they deal with. It could also mean that as super funds shovel more of their members’ money into the US they will need to dial down their own sustainability rhetoric if their asset managers cannot deliver on it.
A damning new ASIC report into death benefit claims handling in superannuation lays bare the scale of the problem and the measures that funds will have to take if they want to solve it. It starts with funds reading what their members really think.
Years of consolidation mean that the list of potential merger targets has dwindled to a mere 13, with the potential that some could wind up stranded as funds opt to merge with others in the same niche or forego another merger in the face of more pressing service challenges.
Superannuation fund trustee boards can’t be mates’ clubs, but nor can they be places where strongly opposing philosophies on the role and purpose of super can happily co-exist, and boards should look past skills matrices to ensure only high-calibre appointments, according to one of Australia’s leading company directors and good governance advocate, David Gonski AC.
In most cases, the adage “time in the market beats timing the markets” would serve super funds which receive regular contributions and have long investment horizons well. But for the $37 billion closed-end State Super, which is in net asset outflow, time is one thing the fund does not have. CEO John Livanas outlines how State Super keeps volatility in check as the fund retreats from private assets.
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