Revealed: Australia’s richest super bosses and what they earn
Australians are paying more in superannuation fees every year than we are collectively spending “on power bills”, in a gouge that affects mum and dad investors. See how it affects you.
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Australians are paying more in superannuation fees every year than we are collectively spending “on power bills”, in a gouge that is lining the coffers of bosses.
A News Corp investigation into the multi-billion industry has found that while savings have more than doubled in a decade, the profits being creamed off hardworking mum and dad members’ investments are eye-watering.
It can also be revealed some board members have been in their positions for almost three decades — far longer than the 12-year tenures corporate Australia typically mandates, to avoid fatigue and tunnel vision.
New regulator data shows the amount of money sitting in super climbed from $1.23 trillion in mid-2010 to $2.86 trillion today, swelling retirement fund fees.
As the long-running battle involving industry super funds, retail super funds and political parties flares up again, industry insiders say there is a “lot of half-truths and misinformation” surrounding the sector.
Not-for-profit industry superannuation funds dominate the top of the super tree, and several of their CEOs and chief investment officers are pocketing $1 million-plus salaries, while the funds make millions of dollars of payments to unions.
These include director’s fees, sponsorship arrangements, marketing and returns on investments.
For instance board members who are from a union and are not paid directly by the super fund can have their payments made directly to their affiliated union.
The funds’ latest annual reports show the highest-earning super CEO for 2018-19 was HostPlus’s David Elia, who was paid $1.19 million, while AustralianSuper boss Ian Silk earned $1.06 million and QSuper CEO Michael Pennisi was paid $1.02 million.
Chief investment officers – who are responsible for managing members’ portfolios – were paid even more, with UniSuper CIO John Pearce’s salary reaching $1.73 million, AustralianSuper’s Mark Delaney earning $1.63 million and First State Super’s Damian Graham receiving $1.33 million.
Retail super fund profits and pay details are murkier, often buried within the financial reports of parent businesses and only showing a portion of the executive’s total remuneration.
And union links to the top of the superannuation sector are stronger than ever – many board members have ties to some of the most powerful unions in the nation including the ACTU.
Industry funds have longstanding model of board composition – 50 per cent of their directors are nominated by a union and the remaining 50 per cent nominated by an employer group.
Liberal Senator Andrew Bragg, the author of Bad Egg: How to Fix Super, said there were too many highly-paid super funds bosses.
He slammed the super system and said it was “not working” by keeping Australians off the pension.
Mr Bragg said only 30 per cent of Australians at retirement age were completely self-funded despite the super system being in place for nearly three decades.
“There’s been mergers that have fallen over because they can’t work out who is going to go on the boards, which means there’s double the director’s fees, union conferences and sponsorships,” he said.
Senator Bragg said some of those on the super fund boards had been on there far too long.
“I don’t think people should be on boards for 28 years – that’s ridiculous,” he said. APRA said there would be “limited circumstances where someone can be on a board for a period extending more than 12 years would be appropriate”.
Australians shell out $32 billion in fees every year, which Senator Bragg said was “more than we spend on power bills”.
Industry Super Australia – the lobby group for industry super funds – is one of the most prolific advertisers urging people to join its funds. In the 2019-20 financial year its total revenue was $23 million, most of which was spent on marketing.
But the Association Superannuation Funds of Australia’s chief executive officer Dr Martin Fahy defended the super system.
He said it’s “intended purpose is to provide adequate income for Australians in retirement and deliver a dignified standard of living”.
“If today’s young people are to avoid ending up on the Age Pension, every single dollar contributed to superannuation counts,” he said.
Wealth for Life Financial Planning principal Rex Whitford said there had been complaints by some super funds this year about people withdrawing up to $20,000 of their super through the Federal Government’s early release scheme.
“But it’s the member’s money – it’s not the fund’s money,” he said.
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Mr Whitford said the increasing size of big super funds was giving them more power and control over the boards of companies in which they had become large shareholders.
“Because of the clout they have, more and more corporations are capitulating to the decisions of industry super funds,” he said.
“The Labor Party continues to be well-funded regardless of the drop in union membership – industry super funds are the new union membership.”
EARLY SUPER ACCESS ‘A GODSEND’
Graham Hood and his wife Miranda Douglas seized the opportunity to access their super early, after suffering hits to their incomes during the pandemic.
The pair, from Umina Beach on the central coast of NSW, withdraw $10,000 from Mr Hood’s retirement savings tax-free to pay down debt — and would not change a thing.
“It was a godsend,” said Mr Hood, 62.
“We had a couple of credit cards with about $10,000 owing and we weren’t getting anywhere with paying them off.
“We had our hours cut and there was no guarantee I wouldn’t lose my job.”
Mr Hood works in book publishing, while Ms Douglas, 53, is in graphic design.
The superannuation dollars — received last financial year — allowed them to pay off debt on two credit cards, which significantly eased the financial strain.
“There were tears after we cut the cards off,” he said.
The couple has since returned to full-time work.
Originally published as Revealed: Australia’s richest super bosses and what they earn