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New challenge Smith leaves ASFA in good shape
Politics and changing priorities mean nine years is a long time for anyone to remain at the helm of a national industry organisation, especially someone not originally grounded in the industry she was expected to represent.
When the chief executive of the Association of Superannuation Funds of Australia (ASFA), Philippa Smith, announced in mid-February that she would be resigning her position effective from the middle of the year, many people had forgotten how little she knew about super when she took up her role.
Looking back over her nine years, Smith now reflects that her lack of background in superannuation may have ultimately proved to be one of her strengths.
Asked to name one of ASFA’s greatest achievements during her time in office, Smith nominates the changes to superannuation included in the last Federal Budget.
Asked to name her greatest disappointment, she nominates the time it has taken to generate meaningful change to the nation’s superannuation environment.
“I’m thinking last year’s Budget changes were significant. They perhaps weren’t entirely the package I would’ve put together myself, but they were significant in terms of making super far more attractive and simpler to understand, and changing the entire psychology and mindset on savings going forward,” Smith says.
“And that didn’t just come about. Things like that don’t just happen. They happen because of a lot of raising of profile, prodding and probing and getting it on the agenda,” she says.
“I can see there are key things that need to happen going forward, including targeting middle income earners and things like soft compulsion to make sure people get to an adequate retirement savings, but I think it is going to take another two or three years.
“ASFA has already begun the research process, but it will take two or three years to get the momentum, and do I really want to stick around for another two or three years?” Smith says.
Explaining the underlying reasons for her decision to resign, Smith says while she feels quite proud of what the superannuation industry had achieved, she wants to broaden her interests.
“It’s been nine years and there’s been a huge transformation in the industry over that period,” she says.
“I came initially from outside the industry, so I wasn’t cloned in the superannuation business. I came from a public policy perspective, and the big public policy issue seemed to me to be retirement incomes,” Smith says.
She says the process has taken longer than expected in terms of developing public policy momentum with respect to the challenges of an ageing demographic and getting to a more adequate and sustainable retirement incomes strategy.
“That has been a big part of my agenda — getting the debate out there and building some momentum,” Smith says.
She says during her time at ASFA the superannuation industry had grown from a relatively unsophisticated base to become a highly sophisticated industry.
“It has gone through some growing pains, but it is a very different industry to what it was,” Smith says. “I would have liked things to have moved a little quicker. It has been a little frustrating.”
Looking at the future of ASFA, Smith believes its strength lies in the quality and depth of its research and the broadness of its membership base.
“The research we do here is proactive research — we look at the trends, we look at the issues and we hope it makes it relevant to politicians and the community.”
Smith acknowledges that the texture of the superannuation industry has changed as the number of funds has actually diminished, but says this needs to be seen against the dramatic increase in the asset base.
“The number of funds have gone down, but the asset base has gone up and is now close to $1 trillion, so I think there is and there continues to be a role for a voice that brings together the superannuation interests,” she says.
“ASFA’s strength is that it covers all sectors of the industry and can bring together a co-ordinated voice — retail, public sector and corporates — and the underlying thing has been, ‘What is in the public interest?’,” she says.
Smith says “the voice of super” continues to be the underlying strength of ASFA — “It is a clear voice that has the strength, the numbers and the credibility in Canberra.
“Treasury does come to ASFA for solutions. They ask what is going to work across the industry, not just a sector of it, and we have enough depth in the policy team to deliver on that,” she says. “That is a really distinguishing feature of ASFA.”
Smith acknowledges that the number of superannuation funds has been significantly reduced and that this has had an impact on ASFA’s membership numbers, but insists the organisation has adapted to handle the situation.
“Yes, the number of funds has gone down, and we re-jigged our member fees a little last year,” she says. “Fees went up to make sure that we, in fact, did have the fee base to sustain the depth of ASFA,” she says. “The rest is user-pay. Only about 20 per cent of ASFA’s costs come through member fees.”
Smith says the fact that ASFA did not get much push back when it put fees up indicates that its members recognise the organisation provides a strong voice with respect to policy and research.
“The industry has gone through a lot of changes and has relied heavily on ASFA for policy, best practice guides, etcetera,” she says. “That is not to say that ASFA ought not change, and one of the things I’ve been conscious of is the need to evolve to meet the needs of the industry. What we provide has to shift to coincide with what the funds want.”
AUTHOR
Mike Taylor
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