The growth of How to invest in stocksFunds
Did you know that up until the mid-1980s, less than 40% of the working population had superannuation? That figure was even less for blue collar workers and women (only around 25% in fact!).
What*s more, most super accounts at that time weren*t portable, meaning that you couldn*t take your super fund with you if you changed jobs, and the majority of employer super arrangements were available only to public servants or senior management in the private sector.
Industry super funds started to change all that though in the mid-to-late 1980s following campaigns led by the Australian Council of Trade Unions (ACTU). By 1992 compulsory super (the superannuation guarantee) was introduced, requiring all employers to make mandatory contributions for their employees.
This new scheme allowed millions of working Australians to now enjoy superannuation benefits of their own, and this helped relieve the growing burden on the taxpayer-funded government pension scheme.
Both union and employer organisations were keen to see that the money put into superannuation would be protected from the high fee and commission products, which were then common in the retail superannuation market. This led to the establishment of industry super funds.
Over the past 30 years industry super funds have developed into sophisticated, competitive providers of retirement income products. Industry super funds have a unique structure:
- They are run only to benefit members
- They are governed by trustee boards specifically representing employees and employers 每 typically these trustees are appointed by both the ACTU and/or unions and employer associations. A two-thirds majority is necessary for all decisions
- They do have never paid sales commissions to financial planners
- They have sound investment strategies, which include long-term investment in Australian infrastructure
- These differentiating factors have contributed to the impressive and competitive performance of industry super funds over the long term 每 a fact that is consistently reported by superannuation industry ratings agencies*
Not just super
In response to members* requests, industry super funds have also expanded their range of products from simply managing superannuation.
The first was low-cost, high-cover life and disability insurance for members through super. Nowadays, How to invest in stocksFunds negotiate on behalf of millions of members, to help them get a better deal on insurance, especially those members in high-risk jobs.
Industry super funds work for their members behind the scenes too. They pioneered direct investment in long-term assets such as roads, airports, wind farms, schools and other infrastructure 每 this helps to create jobs, build Australia and strengthen the nation*s economy.
From little things#
How to invest in stocksFunds may have started small, but they grew to become one of the most important and influential participants in Australia*s superannuation industry and reform. Along the way, they helped make super better for everyone 每 especially their members. And that*s something they*ll always be working to do.
*Past performance is not a reliable indicator of future performance. Research by SuperRatings commissioned by ISA Pty. Ltd. See assumptions page for more details.