Big super funds appear to have taken at least one government change to their overall operations in their stride – the compulsion to hold a member annual meeting, with the first necessary before March next year.
Some, such as AustralianSuper, CareSuper and UniSuper, have already been holding regular large meetings for members for years, as part of their communications program. The others, such as Hostplus, have already held one or have advanced plans, such as LegalSuper, which will hold its first such meeting in December.
The industry has discussed big meetings like these for years. Before everyone got used to Zoom and similar online services, they were potentially very expensive. The costs for putting on meetings for a two-million-member fund, of which Australia has two – REST and AustralianSuper – have been estimated at $5.9 million (in an industry fund submission to the Senate Economics Legislation Committee). However, Treasury estimated at the time of the introduction of the law last year, that the cost would be an average of just $66,000.
A detailed assessment of the law was written earlier this year by law firm MinterEllison and published by the LexisNexis Superannuation Law Bulletin. The lawyers point out that there are no regulations accompanying the change to the SIS Act, so to a large extent the funds are able to mould them to suit their members’ profiles. Craft or single-industry funds can hold a different style of meeting than a big multi-sector fund.
The article’s authors are not particularly impressed, though, with the legislative change. They say: “Arguably, in their currently legislated form, annual members’ meetings will do little to increase member engagement. Time will tell whether the annual members’ meetings introduced by the Act prove to be: 1) an important first step towards expanded meetings where members are afforded a meaningful say in how their retirement savings are managed; or 2) remain limited to a costly opportunity to ask questions.”
The article points out that the right for members to ask questions of the trustee already exists in the old SIS Act. All funds have a mechanism to handle questions, primarily via email or pay-free phone lines. Under the member meetings change, though, the trustee’s representatives are forced to answer questions either at the meeting or within one month and may be subject to a $10,500 penalty if they don’t do so. Unlike at listed company annual meetings or Managed Investment Schemes’ irregular meetings, the members have no voting rights. The new rule also requires a majority of directors and the auditor to be present.
While AustralianSuper has not yet held a meeting under the new rule, it has been holding such meetings for about 15 years – initially by ARF, one of the two big funds which formed Australian Super, and continued by the merged entity. A spokesperson said that since the merger in 2007, attendances have grown from about 500 to almost 5,000, encompassing both physical and online gatherings. “Last year we had about 1,000 people attend at both Sydney and Melbourne, the spokesperson said. “We’ve been doing them in every capital city for the last four years.”
CareSuper has also been holding similar member meetings for about 15 years, with a roadshow across various locations to report on the past year and what to expect ahead. Julie Lander, the fund’s chief executive, said: “This year, we will have one meeting and it will be virtual so it will actually be easier and lower cost, but it will be interesting to see what engagement we have. In theory, more members may ‘beam in’ as they won’t have the issues of travel, weather, parking, etc.”
She said: “We get a lot of repeat attendees so those who attend definitely seem to like them and, more importantly, engage with executives, the chair and other staff beforehand and afterwards. I think they really feel connected when they can meet the people with whom they’re entrusting their retirement savings face to face.”
UniSuper has been holding similar in-person meetings for several years, but only for members approaching, or in, retirement. These are typically held in seven or eight of the capital cities, with last year’s tally across the meetings coming to about 4,500. The largest was in Melbourne (1,500 attendees) and the smallest Hobart (150).
The fund, which tends to have a sophisticated membership base, plans to do one under the new rule for all members early next year, according to Kevin O’Sullivan, the fund’s chief executive. It is doing its first webcast for the over-60s in about three weeks.
The in-person meetings have typically involved presentations from himself, John Pearce, the CIO, and an advisor who is well versed in technical advice. Members are given about 45 minutes to ask their questions and then to meet fund representatives and arrange further meetings if required at a sandwich lunch afterwards. “The feedback has been very strong,” O’Sullivan said.