An industry superannuation fund (or, simply, 'industry fund') is an
Australian superannuation fund originally established to provide for the
retirement
Retirement is the withdrawal from one's position or occupation or from one's active working life. A person may also semi-retire by reducing work hours or workload.
Many people choose to retire when they are elderly or incapable of doing their j ...
of workers from a specific industry. While industry funds are no longer tied to specific industries, they remain
not-for-profit
A nonprofit organization (NPO) or non-profit organisation, also known as a non-business entity, not-for-profit organization, or nonprofit institution, is a legal entity organized and operated for a collective, public or social benefit, in co ...
,
mutual fund
A mutual fund is a professionally managed investment fund that pools money from many investors to purchase securities. The term is typically used in the United States, Canada, and India, while similar structures across the globe include the SICAV i ...
s which are membership-based and do not have
shareholder
A shareholder (in the United States often referred to as stockholder) of a corporation is an individual or legal entity (such as another corporation, a body politic, a trust or partnership) that is registered by the corporation as the legal own ...
s. Industry super funds can be contrasted with ''retail'' super funds (or 'wholesale master trusts'), which are public offer funds managed by financial institutions. Profits from retail funds are distributed to shareholders or investors (the
trustee
Trustee (or the holding of a trusteeship) is a legal term which, in its broadest sense, is a synonym for anyone in a position of trust and so can refer to any individual who holds property, authority, or a position of trust or responsibility to t ...
s of the fund), whereas industry funds return profits directly to members.
Industry Super Australia (ISA) is the
peak body
A peak organisation or peak body is an Australian term for an advocacy group or trade association, an association of industries or groups with allied interests. They are generally established for the purposes of developing standards and processes, ...
of the industry fund sector.
From 1 July 2005, choice of fund rules came into effect, giving most Australian employees the option to choose the fund into which their employers paid their superannuation contributions. In practice, over 75% of workers remained with their employer’s default fund, which was usually an industry fund. From this time, industry super funds were also no longer required to be industry-specific, and most became open to membership by a majority of Australian workers. Such open funds are called public offer funds. Since 1 January 2014, all employers must select an approved
MySuper
MySuper is part of the Stronger Super reforms announced in September 2011 by the Gillard Labor government for the Australian superannuation industry to replace the previous default funds system with a new default system using low cost and simple ...
account as their default super fund into which they must pay all default super guarantee contributions (minimum employer contributions).
However, employees can nominate an alternative investment fund, called a stapled super fund.
The
Fair Work Commission
The Fair Work Commission (FWC), until 2013 known as Fair Work Australia (FWA), is the Australian industrial relations tribunal created by the ''Fair Work Act 2009'' as part of the Rudd Government's reforms to industrial relations in Austral ...
determines which superannuation funds are suitable to be industry super funds and adopted by employers as default funds.
History of industry super funds
Prior to 1992, superannuation was common among workers; however, there existed no national legislative requirement for employers to pay superannuation for their employees. Instead, industrial awards negotiated by the union movement provided for businesses to contribute to superannuation funds for, and on behalf of, their staff. This system was not uniform across the economy, and superannuation policies were tied to individual awards, which differed between industries.
In 1992, the Keating Labor government introduced a compulsory ‘Superannuation Guarantee’ system as part of a major reform package to help relieve the growing burden on the taxpayer-funded government pension scheme.
The change came about through a tripartite agreement between the government, employer groups and trade unions. Trade unions agreed to forgo a national 3% pay increase for their members, which would instead be put into the new superannuation system for all employees in Australia. This was matched by employers' contributions which were set to increase over time. This reform resulted in 72% of Australian workers being covered by retirement savings schemes.
Both union and employer organisations were keen to ensure that money invested into superannuation would be protected from high fees and commission products. This led to the establishment of trade union-based industry super funds, in contrast to pre-existing retail funds.
Today
Today, industry funds are non-profit mutual funds with over 13 million accounts. Industry super funds have policies designed for the benefit of members, and governed by trustees representing employers and employees within the industry.
, ISA members are:
*
AustralianSuper
AustralianSuper is an Australian superannuation fund headquartered in Melbourne, Victoria. With approximately one in every ten Australian workers as members, it is Australia's largest superannuation fund.
AustralianSuper is an industry superan ...
*
Aware Super
Aware Super is an Australian superannuation fund headquartered in Sydney, New South Wales. With $150bn under management and over 1 million members, it is Australia's third-largest superannuation fund.
History
It was initially established in ...
*
CareSuper
*
Cbus
The CBUS was a free downtown circulator bus in Columbus, Ohio. The service was operated by the Central Ohio Transit Authority. The CBUS service primarily traveled along High Street between the Brewery District and the Short North. The servic ...
*
Energy Super
In physics, energy (from Ancient Greek: ἐνέργεια, ''enérgeia'', “activity”) is the quantitative property that is transferred to a body or to a physical system, recognizable in the performance of work and in the form of heat ...
*
FIRSTSuper
*
HESTA
*
Hostplus
Hostplus is an industry superannuation
An industry superannuation fund (or, simply, 'industry fund') is an Australian superannuation fund originally established to provide for the retirement of workers from a specific industry. While indust ...
*
legalsuper
*
Media Super
Media may refer to:
Communication
* Media (communication), tools used to deliver information or data
** Advertising media, various media, content, buying and placement for advertising
** Broadcast media, communications delivered over mass el ...
*
Spirit Super
Spirit or spirits may refer to:
Liquor and other volatile liquids
* Spirits, a.k.a. liquor, distilled alcoholic drinks
* Spirit or tincture, an extract of plant or animal material dissolved in ethanol
* Volatile (especially flammable) liquids, ...
*
NGS Super
NGS may refer to:
Places
* NGSO (NGS orbit), non-geostationary orbit
* Nagasaki Airport (IATA airport code: NGS) in Omura, Nagasaki, Japan
Organisations
* National Galleries of Scotland, representing the national art collection of Scotland
* N ...
*
REISuper
*
TWUSUPER
Other industry super funds (that are not members of ISA) include
Aware Super
Aware Super is an Australian superannuation fund headquartered in Sydney, New South Wales. With $150bn under management and over 1 million members, it is Australia's third-largest superannuation fund.
History
It was initially established in ...
,
REST Industry Super, and
UniSuper
UniSuper is an Australian superannuation fund that provides superannuation services to employees of Australia's higher education and research sector. The fund has over 450,000 members and $100 billion in assets (funds under management and total ...
.
ME Bank was owned by 26 industry super funds,
until it was sold to
Bank of Queensland in 2021.
Industry Super Australia
Industry Super Australia (ISA) is "a research and advocacy body for Industry SuperFunds", which aims to make the most of the retirement savings of the individual members of its member funds. It is a peak body for the industry superannuation sector. ISA comprises 15 industry super funds as members, each of which is
not-for-profit
A nonprofit organization (NPO) or non-profit organisation, also known as a non-business entity, not-for-profit organization, or nonprofit institution, is a legal entity organized and operated for a collective, public or social benefit, in co ...
, including
AustralianSuper
AustralianSuper is an Australian superannuation fund headquartered in Melbourne, Victoria. With approximately one in every ten Australian workers as members, it is Australia's largest superannuation fund.
AustralianSuper is an industry superan ...
,
Hostplus
Hostplus is an industry superannuation
An industry superannuation fund (or, simply, 'industry fund') is an Australian superannuation fund originally established to provide for the retirement of workers from a specific industry. While indust ...
and
Cbus
The CBUS was a free downtown circulator bus in Columbus, Ohio. The service was operated by the Central Ohio Transit Authority. The CBUS service primarily traveled along High Street between the Brewery District and the Short North. The servic ...
. ISA-member funds collectively hold about 5 million accounts.
, the Board of ISA is chaired by
Greg Combet
Gregory Ivan Combet (; born 28 April 1958) is a former Australian politician and trade unionist. He was Secretary of the Australian Council of Trade Unions between 1999 and 2007. He was elected member for the New South Wales Federal seat of Ch ...
and includes representatives from industry super funds, former state and federal ministers, and the
ACTU
The Australian Council of Trade Unions (ACTU), originally the Australasian Council of Trade Unions, is the largest peak body representing workers in Australia. It is a national trade union centre of 46 affiliated unions and eight trades and l ...
Secretary,
Sally McManus
Sally McManus (born 31 July 1971) is an Australian trade unionist, feminist and political activist who has served as the Secretary of the Australian Council of Trade Unions (ACTU) since 2017. She is the first woman to hold the position of Secret ...
.
Advertising campaigns
ISA manages collective projects on behalf of its member funds, including research, policy development, government relations and advocacy, as well as coordinating the Industry SuperFunds Joint Marketing Campaign. The campaign is responsible for a number of prominent advertising and marketing campaigns, including the long-running “Compare the Pair” television and press campaign, which has run multiple iterations over many years, has achieved household recognition throughout Australia. The campaign is currently in its 3rd generation.
The "From little things" campaign used
Paul Kelly and
Kev Carmody
Kevin Daniel Carmody (born 1946), better known by his stage name Kev Carmody, is an Aboriginal Australian singer-songwriter and musician, a Murri man from northern Queensland. He is best known for the song "From Little Things Big Things Grow", ...
's song "
From Little Things, Big Things Grow
"From Little Things Big Things Grow" is a protest song recorded by Australian artists Paul Kelly (Australian musician), Paul Kelly & The Messengers on their 1991 album ''Comedy (Paul Kelly & The Messengers album), Comedy'', and by Kev Carmody ( ...
" from September 2009 until the end of 2014. After that, the
Ben Lee
Benjamin Michael Lee (born 11 September 1978) is an Australian musician and actor. Lee began his career as a musician at the age of 14 with the Sydney band Noise Addict, but he focused on his solo career when the band broke up in 1995. He appe ...
song "We're All in This Together" would be used.
Consolidation of accounts
In September 2018, ISA arranged a deal by 19 industry super funds to consolidate superannuation accounts of all of their members. Involving half a million inactive accounts containing few funds, it is estimated that it may collectively save its members around a year in what they would otherwise pay in fees and
life insurance premiums. All members of ISA, as well as REST, Equipsuper and First State Super, have signed up to the deal.
All inactive accounts containing less than are now automatically rolled into a central pool, managed by a specialist fund called AUSFund. If any active accounts exist for the member in question with any of the funds, the money in the inactive account is automatically transferred into that fund.
[
]
Submissions and representations
Since ISA’s inception, it has made submissions to government on a number of superannuation-related topics, including:
* The Murray Inquiry (2014) into Australia’s financial systems, with particular reference to superannuation
* The Cooper Review (2010) into the superannuation system and regulatory improvements
* The Senate Standing Committee on Community Affairs covering the proposed tightening of pension eligibility
* The Trowbridge Review into potential conflicted remuneration and its effect on life insurance advice
* The Parliamentary Joint Committee on Corporations and Financial Systems Inquiry
* The Senate Economics Legislation Committee (2013) review for streamlining the Future of Financial Advice Bill.
Retail super funds
The four major banks in Australia and other financial institutions own the majority of for-profit retail super funds. These owners of the retail funds have been lobbying federal governments for legislative changes to de-regulate the process traditionally used to nominate workplace default funds and make it easier for employers to adopt a bank-owned fund. In 2012, the Abbott government committed to opening up the default fund section system suggesting that doing so will generate greater competition.
As at July 2018, the major retail super funds were:
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Flexible Super
*Bendigo Smart Start Super (Bendigo Bank
Bendigo and Adelaide Bank is an Australian financial institution, operating primarily in retail banking. The company was formed by the merger of Bendigo Bank and Adelaide Bank in November 2007.
Before the merger, Bendigo Bank delivered its p ...
)
*BT Super For Life (Westpac
Westpac Banking Corporation, known simply as Westpac, is an Australian multinational banking and financial services company headquartered at Westpac Place in Sydney, New South Wales.
Established in 1817 as the Bank of New South Wales, ...
)
*ING DIRECT Living Super (ING Australia
ING Bank (Australia) Limited ( trading as ING since 2017, and as ING DIRECT 1999–2017) is a direct bank operating in Australia. It is a wholly owned subsidiary of the multinational Dutch bank, ING Group. ING Australia holds an Australian banki ...
). In December 2015, ING had AU$1.6 billion in super funds under management, with 34,000 active superannuation accounts in 2014.
*MLC Masterkey Super (National Australia Bank
National Australia Bank (abbreviated NAB, branded nab) is one of the four largest financial institutions in Australia (colloquially referred to as "The Big Four") in terms of market capitalisation, earnings and customers. NAB was ranked 21st-la ...
)
* Colonial First State
Colonial First State (CFS), is an Australian wealth management group that provides investment, superannuation and retirement products to individuals and corporate and superannuation fund investors.
History
The company was established in 1988 ...
( Commonwealth Bank)
*OnePath ( ANZ Bank)
*Suncorp Everyday Super (Suncorp
Suncorp Group Limited is an Australian finance, insurance, and banking corporation based in Brisbane, Queensland, Australia. It is one of Australia's mid-size banks (by combined lending and deposits) and its largest general insurance group, fo ...
)
Testimony at the Hayne Royal Commission highlighted the various actual and potential conflicts of interest that exist retail super funds are owned by banks: for example, when bank advisors are required to recommend the financial products of their bank to a member of the retail super fund, this may not be in the best interest of that member.[The Age, 22 September 2018]
Everything you need to know about the royal commission so far
/ref> Consequently, several banks have since commenced processes to dispose of their wealth management divisions.[
]
See also
*Superannuation in Australia
In Australia, superannuation, or just super, is the term for retirement pension benefit funds. Employers make compulsory contributions into these funds on behalf of their employees.
Superannuation is compulsory for all employed people workin ...
References
External links
*
*
Society at a Glance 2014 Highlights: AUSTRALIA OECD Social Indicators
Melbourne Mercer Global Pension Index: Australia
{{DEFAULTSORT:Industry Superannuation
Superannuation in Australia