
Issue No 3		05 March 1999

Trades Hall

Superman with Mark Lennon

Industry funds, those funds sponsored by employers and unions, have really started to come of age.


	Superman?

A child of the mid 80's, they are in the mid 90's, on the threshold of becoming the major players in the superannuation industry.

There are now some 117 industry funds in existence. They have some 5.4 million accounts and approximately $23 billion in assets. The size of the funds vary significantly. The two largest funds have over $2 billion each in assets, the smallest has $4 million.

In terms of membership, the largest fund had around 800,000 members whilst the smallest had 200. The ten largest industry funds account for some two thirds of assets in the sector.

Over the last fifteen years, industry funds through the vehicle of award superannuation, have been successful in giving working people the opportunity to provide for their retirement.

Prior to the introduction of industry funds, the only employees who had access to superannuation were those employed in the public sector or in large organisations.

Those employed in larger organisations did not necessarily have automatic coverage rather, superannuation was a privilege extended to them after a particular period of service with the company.

Individuals who did not fall into one of the above categories could seek personal superannuation coverage through an insurance company, but generally at a high cost. Industry funds provided a low cost, accessible alternative.

The issue of costs has been one of the industry funds great success stories. All funds charge an administration fee of $1 or less per week. The funds have also bargained hard to drive down other costs in the industry such as fund managers fees.

In more recent times industry funds have begun to expand the services they offer to members. Many funds now offer members services such as: investment choice, home loans, expanded insurance cover and allocated pensions. In many of these areas, industry funds have been the pacesetters.

The end of the 90's sees industry funds facing its greatest challenge - choice of funds. Presently the fund that employers pay contributions into is regulated by the relevant award. The Federal Government is seeking to change this arrangement by obligating employers to offer a choice of funds to employee's.

Whether the Federal Governments legislation is successful or not the reality is that choice is here already. Many State jurisdictions including NSW, offer choice of fund to employee's.

Industry funds have recognised the trend toward choice and have put in place strategies to meet it. Around thirteen funds are now public offer which means they can take members from a broader market. Four of the larger funds have embarked on a television marketing campaign (who could have missed the Bernie Fraser advertisement), still others have used radio or direct mail.

As well as the challenge there are opportunities for industry funds. Many companies within their own in-house funds have questioned whether they should remain in that business. They are consequently seeking to outsource this particular function, industry funds are a natural alternative.

Many of the above issues I'm hoping to expanding upon in future columns and I trust they're of interest.

Mark Lennon will be donning the cape and silly undies to write a regular column on superannuation.

   Mark Lennon

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  Issue 3 contents

Interview: How Organising Works
The ACTU�s Sarah Kaine is part of a new breed of union organiser who help workers stand up for themselves.

Unions: Big Boys Bank on Mergers
Mergers of the big banks are back on the agenda, and the Finance Sector Union is leading the community campaign against them.

History: Commemorating Our Dear Departed Equal Pay Activists
Two women who deserve special recognition and commemoration as part of our Women's Day celebrations are Eileen Powell and Edna Ryan, both of who played a crucial role in the struggle for equal pay.

Legal: New Judge Announces Zero Tolerance Of Pay Inequity In NSW
The NSW Industrial Relations Commission is training its sights on industrial raw-deals for women, and targeting the traditional under-valuation of women's work.

Review: Keep the Australia in Australian Television.
Local content quotas for Australian television are under threat from our Kiwi cousins.

Campaign Diary: Radical Conservatives Raise Their Own Bar
This Monday writs are issued for the state election, The phoney campaign ends and the real one begins; and the issue of stability, the need for it and the lack of it, is set to dominate the next four weeks.

» Unions Win Virtual Access To The Workplace

» Shaw To Snip At Gender Pay Gaps

» Living Wage - Round One To Unions

» Workers Fight Hotel Chain's Contracts Push

» No Picnic, No Pay

» The Modern Day Tales Of Robin Hood

» Nothing Casual About Woolies Drivers

» Unionists Flex Muscles for a Gay Time