When you’re the head of the superannuation fund for workers in the motor trades industry, it helps if you have an interest in cars.
And Leeanne Turner – the Chief Executive Officer of the Motor Trades Association of Australia Superannuation Fund (MTAA Super) – isn’t just interested in cars, she loves them.
She grew up racing her brother’s go-cart and watching motor racing from the tender age of seven. Indeed, she comes from a motoring family – her grandfather was a mechanic, her brother is a panel beater and her son is a mechanic too.
It’s a background that serves her well at the helm of the superannuation fund for some 260,000 members, many of whom work in the automotive industry.
“Our members work for the thousands of Australian businesses that keep our cars on the road – the retailers, mechanics, repairers and more, so it’s important that we serve them well,” Leeanne said.
From strength to strength
Since its inception in 1989, the Canberra based superannuation fund has grown significantly in size and financial muscle, achieving a strong return of 7.5% per annum over the past 25 years. This February, MTAA Super crossed the $8.5 billion mark in funds under management.
Last year was a particularly memorable year for MTAA Super as it celebrated 25 years in the business. Additionally, MTAA Super’s MyAutoSuper or Balanced Option was ranked in SuperRatings Top 10 list in for 2014. MTAA Super Chief Executive Leeanne Turner was awarded the Executive of the Year from Fund Executives Association (FEAL) while chair John Brumby won the Australian Ins titute of Superannuation Trustees’ (AIST) Trustee of the Year Award. Just months before, Philip Brown, MTAA Super’s Executive Manager, Investments, won AIST’s prestigious Investment Award for Excellence. These are high accolades for the industry fund.
Leeanne attributes the Fund’s success to its innovative, results-driven culture and its focus on members. “We exist solely for our members and we never lose sight of that. From the Board down, every person in the organisation is focused on helping our members maximise their retirement savings and achieve financial security in their post-working years,” Leeanne explained.
According to APRA figures released this month, the superannuation industry is set to reach $2 trillion in just a few months, 4th largest after the US, UK and Japan and significantly exceeding the size of Australia’s GDP (approximately $1.5 trillion). Additionally, an ageing population combined with numerous regulatory and legislative changes have intensified focus on this fast growing sector.
Working to protect a fair and stable superannuation system is a key part of Leeanne’s role. “As an industry, stable policy settings are important for long-term investment propositions. Small changes can have a big impact on members’ retirement balances, employers’ responsibilities and the general public’s confidence in the system.”
David Murray’s wide-ranging Financial System Inquiry (FSI) is expected to usher in even more changes to the superannuation system, where superannuation tax settings are currently skewed toward Australians with more super rather than less.
Other key changes include the recent freeze in the Super Guarantee (SG) and continuing uncertainty about superannuation’s role in the award wage system. The Federal Government has frozen the SG at 9.5% until 2021. Under previous plans, the SG would have increased to 12% by 2019-2020. It will now be 2025 by the time the guarantee reaches 12%, posing serious questions about the adequacy of retirement savings for a population living well into its 70s and 80’s.
Champion of industry
Uniquely for an industry fund, MTAA Super grew out of an employer association, the Motor Trades Association of Australia. The Fund’s early support for its employers has meant it has stood side-by-side with the automotive industry as it weathers significant challenges.
“Though the spotlight has been on the decline in Australian car manufacturing, the outlook for the automotive industry is not all gloom and doom. Australia has one of the highest rates of car ownership in the world, with 17 million cars on the road and close to a 320,000 strong workforce in retail, service repair and recycling.” This latter segment is a core part of MTAA Super’s employer base.
“People might be surprised to know that there is a skills shortage of close to 20,000 automotive mechanics in Australia. This is driven by factors ranging from rapid technological advances, changing skill requirements and a relatively low entry level wage. To this end, MTAA Super has created the Auto Pathways program, aimed at educating young men and women about careers in the automotive sector,” Leeanne said.
State-based initiatives like the Motor Trades Apprentice of the Year Awards also help to encourage and support individuals by recognising the hard work and dedication of promising apprentices.
The Fund’s strong relationship with the motor industry is also obvious through its close support for employers, mostly small- to medium-sized businesses.
“We have a strong relationship with our employers and work hard to support them in managing their super obligations,” Leeanne said.
In 2014, the Fund launched the one-stop MTAA Super Clearing-house, an online payment facility which helps employers pay their super contributions faster and more efficiently. Additionally, its network of Business Development Managers (BDMs) work closely with employers to keep them abreast of superannuation developments. The Fund’s BDMs regularly host workplace seminars to educate staff at employer sites about superannuation basics and make them aware of the Fund’s financial planning services.
It is all part of what the Fund sees as its value proposition to members and employers, and indeed, to all Australians.
“Despite MTAA Super’s close affiliation with the automotive trades, we are a public offer fund, which means any and every Australian can join.
“As we are a not-for-profit fund, all of our profits are returned to members. We have lower average fees than other super funds and we don’t pay sales commissions. We offer a range of investment options across different asset classes and risk tolerances and our best practice governance model has been a strong foundation for our growth.”
MTAA Super is one of the few industry funds to adopt the “3x3x3″ Board model with equal representation from employers, employees and independents. In a recent article for the Financial Standard profiling MTAA Super’s governance model, the Fund’s Chair John Brumby mentions,” It’s been a ten out of ten experience, allowing us to bring in new talent and skill sets and has opened up opportunities for women to get onto boards”. MTAA Super is also unique in this regard with a third of the Fund’s Board composed of women.
MTAA Super also invests broadly on behalf of its members. It invests heavily in nation-building infrastructure assets such as Flinders Ports, Sydney Airport and Brisbane Airport as well as significant commercial property assets in Melbourne, Sydney and Canberra, which it describes as a win-win for both members as well as the Australian economy.
“These types of investments deliver strong, reliable, long-term returns for the Fund’s members while being less exposed to the risks compared to listed assets. They also allow ordinary working Australians to hold a stake in key infrastructure assets that would otherwise be unavailable to them,” Leeanne outlined.
Leeanne says MTAA Super’s ethos as an all-profit-to-members fund has helped to shape its relations with its employees. Much of MTAA Super’s success has been driven by its strong, collegial staff culture. It’s a team-driven workplace where people care about each other, both professionally as well as personally.
“We believe that a successful workplace is one where employees are inspired to achieve strong professional results and have the personal support to do so,” said Leeanne proudly.
Being a good corporate citizen is important to MTAA Super. The Fund in partnership with Lifeline Australia created the ‘readthesigns,’ program in 2004 which promotes help seeking behaviour and suicide prevention among young male apprentices. Suicide currently accounts for 25% of all deaths for males aged 15 to 24. The program is implemented via a network of state-based training centres where apprentices learn about the importance of mental health and coping strategies to deal with workplace stress, depression and anxiety.
SUPERANNUATION: A KEY ISSUE
“Superannuation for most people is their biggest investment outside the family home. Yet most people aren’t tuned into their super in the same way as they might be to their mortgage. This is an industry-wide challenge and we need to explore effective ways to help people strengthen their understanding and engagement with their super,” Leeanne said.
“This is even more important given the ongoing legislative changes to super and the fact that adequacy of retirement savings continues to be a significant issue. It is critical that Australians understand the importance of their super. This can mean the difference between retiring before 70 or working long past it.”