THE JOURNAL OF SUPERANNUATION MANAGEMENT• FS Super

BUILDING SUPER EXCELLENCE

The National Achievement Award winning executives are considered leaders in superannuation and the management of Australia’s retirement savings. As the industry fronts constant change, these executives are showcasing the leadership and foresight that will direct superannuation’s future. Darren Snyder reports.

FS Super THE JOURNAL OF SUPERANNUATION MANAGEMENT•

This ability to build teams has served Stevens well as he prepares to help REST enter the next wave of superannuation challenges. The most immediate of those is addressing the increasing industry im-portance of data analytics.

REST’s data analytical skills are spread across the $37 billion fund but it has made a decision to centralise the function under Stevens’ CFO banner. He is currently re-cruiting to build capability in the area.

“Data is so important for the fund. We have a wealth of data but the challenge is how to harness it to gain better insights into member behaviours and also under-stand the drivers behind our key perfor-mance indicators,” Stevens says.

“There’s two aspects to it: there’s the member insight part of the data – so try-ing to understand more about behav-iours…and getting the data to try and predict what behaviours occur, and ther-erfore what are the actions we can do to trigger those sort of behaviours.

“On the other side of it, importantly is really a means to measuring and moni-toring our own performance. It’s about both understanding the lag indicators or what the data’s telling you and then try-ing to draw that down to say what are the lead indicators or the triggers that are telling you that you’re heading in the right direction.”

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R EST Industry Super chief financial officer Chris Stevens was supposed to come to Australia from Britain on a two-year se-

condment but about 20 years later, he remains Down Under.REST was one of Stevens’ first clients during a 15-year period

in the Australian custodial services department at J.P. Morgan.The role of chief financial officer had not even been thought

of when the two first met, but Stevens was later appointed as joint chief risk officer and inaugural CFO in 2008. More re-cently he became the inaugural National Achievement Awards’ Chief Financial Officer of the Year (The awards were a joint initiative of La Trobe Financial and Financial Standard).

Joining REST post the Global Financial Crisis, Stevens ex-plains the industry fund held its own during a tumultuous pe-riod and was well served by its long term view – both with in-vestments and a supportive internal culture.

“There wasn’t a knee-jerk reaction to cut costs everywhere, it was still seen as important to invest in our people and build the capability,” Stevens says.

“I was lucky to get that role at the time and then to have that support. Looking back we were very heavily outsourced and re-liant on our service provider, especially our administrator, so a lot of it was taking more control over the financial aspects of the organisation and also building a culture within the organisation around financial discipline.”

One of Stevens’ first actions was to build separate cost report-ing whereby each manager had their own budget and were held accountable. It was an attempt to change previous mechanical habits and drive better accountability.

Stevens says that implementation has obviously evolved over the time “and made my life a lot easier.” He adds managers know if they ask for more money next year it will have to be justified with detail including offsets and savings. It is about making sure “people have a financial discipline.”

The quote

We have a wealth of data but the challenge is how to harness it to gain better insights into member behaviours.

The numbers

$37bnSize of REST Industry Super.

open market and “we owe it our members to do that.”“To keep the lights on while you’re running millions of transac-

tions through the system year on year, and not skipping a beat on quality service and compliance obligations, that’s where I suppose the challenge is,” Leach says.

“It’s about getting money to the right spots in the right form. But the how we get there is changing. Those changes drive and shape the nature of your work force too.”

Leach says the fund has heavily invested and continues to invest in change management capability, not just within operations. He says there will always be processes, systems and technology, “but people are the glue.”

As part of the fund’s executive, Leach has significant input in to capability assessments. He is one of the judges as to whether Uni-Super has the technology and operations to confidently embark on a project.

He knows his role won’t look the same in three to five years as it does today. Whether that’s through legislative change or the era of automation, Leach says the only certainty is that his job will be far more technical in nature. But for now the focus is not about what his role is going to be, but rather what the fund is going to look like in the 10 or 20 years.

Putting investment and advice asideAlso citing the importance of building sup-port teams is UniSuper chief operating of-ficer Steven Leach.

The 2015 National Achievement Awards’ Chief Operating Officer of the Year says more than ever super funds have are hiring staff with technical experience.

“More and more of the skills that are needed are far more analytical in terms of the exception handling and other skills to get the same outcomes we’ve always had,” Leach says.

He joined UniSuper more than five-and-a-half years ago in a head of operations role that reported to an executive manager who looked after technology and projects. During the fund’s restructure about two years ago, the technology and projects role was split out to operations and Leach was made an executive.

Chief of operations at the $52 billion in-dustry fund means Leach is heavily involved in administration for all the pension and super products. His remit does not include UniSuper’s expanding investment team or the fund’s advice operations.

Leach explains that during his first few years UniSuper was in a remediation phase of getting its core systems and processes up to the required level as one of Australia’s largest super funds. He describes it as a “hy-giene approach”.

He says it will be his role over the next cou-ple of years to build on digital programs and the redesign or refreshment of product and benefit design. It is all part of ensuring UniS-uper is properly aligned to recommendations from the Financial System Inquiry (FSI), including Comprehensive Income Products for Retirement (CIPRs). Leach is also over-seeing the refreshment of UniSuper’s de-fined beneft design to take to the market in the next couple of years.

Leach is pragmatic about the layers of con-siderations and challenges that will continue to meet his role. He says talk about super fund choice and defaults has been around for numerous years, as has talk about the money washing around super and the tax levers that may be pulled or pushed.

“Now it’s all becoming real,” Leach says.Outside of choice and defaults there are

other competitive forces. Leach says it is now hard for any super fund to compete without a reasonable digital offering to their member-ship. He says UniSuper operates as if it’s in an

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FS Super THE JOURNAL OF SUPERANNUATION MANAGEMENT•

The quote

To keep the lights on while you’re running millions of transactions through the system year on year, and not skipping a beat on quality service and compliance obligations, that’s where the challenge is.

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THE JOURNAL OF SUPERANNUATION MANAGEMENT• FS Super

Super for the long termDuring his recent five-year stint as Telstra Super chief investment of-ficer, Jim Christensen also focused on shaping the corporate fund’s fu-ture and maintained its position among Australia’s top super offerings.

Christensen told Telstra Super in 2015 his investment team of 14 employees “we’re always watching, calculating, estimating, [and] weighing up.”

“This is our members’ money, so it’s important to get the strategy right. That’s the excitement, as well as the challenge,” Christensen says.

This year the 2015 National Achievement Awards’ Chief Invest-ment Officer of the Year made a move back to Queensland asset man-ager QIC, and was appointed managing director – global multi-asset.

Christensen’s career first started at Queensland Treasury as an economist and strategist before moving to the Queensland Invest-ment Corporation (QIC) in a similar role, but in charge of a much larger portfolio and managing around 100 team members.

During his initial employment at QIC, Christensen said he thrived on the adrenalin of delivering consistently high returns for a major financial player across a range of asset classes.

“But after a while, I felt I was becoming more of a manager and less of a hands-on analyst. I wanted to have more control, to play my part and be closer to the decision making process. When the Telstra Super job came up, I grabbed it,” Christensen says.

At Telstra Super he was overseeing a diverse investment portfolio in-cluding global and Australian equities, currency and property.

“Managing risk for members is a delicate tight-rope walk between seizing short-term opportunities and waiting for longer-term gains. Stock markets and currencies are volatile and unpredictable, we need to set the building blocks right between selecting high-risk stock which usually offers higher returns, and safer investments which are less risky, but generally don’t deliver as much,” Christensen says.

As for delivering a superannuation fund of the future, Christens-en said he encourages members to consider an age-based invest-ment approach.

“Take risks when you’re young, look at equities and similar assets, because you could be able to take advantage of both good and bad re-

The quote

Success in current investment markets might mean choosing a strategy that only pays off in three years’ time.

turns in the market cycle. Success in current investment markets might mean choosing a strategy that only pays off in three years’ time,” he says.

“But the nearer you get to retirement, the less risk your portfolio should have, because you don’t have the time to recoup potential losses. Generally a more defensive strategy, investing in things such as bonds, property or cash is more appropriate the nearer you get to retirement.”

La Trobe Financial president and chief executive Greg O’Neill said it is clear from introducing these awards in 2012 “that our retirement savings are in good hands and from what we have seen over the past decade their [super funds’] performance has been exemplary and deserve recognition.”

Finalists for the inaugural Chief Financial Officer of the Year were: Phil Hagen (En-ergy Super); Chris Stevens (REST Industry Super); and Ruby Chi (VicSuper).

For the Chief Investment Officer of the Year, finalists were: Oscar Fabian (VicSu-per); Robert Fowler (HESTA); and Jim Christensen (Telstra Super).

For the Chief Operating Officer of the Year, finalistswere: Steven Leach (Uni-Super); Tony Griffin (Local Govern-ment Super); and Antony Thow (LU-CRF Super). fs

A JOINT INITIATIVE OF

Winners of the 2015 Selecting Super Awards and National Achievement Awards, a joint initiative of La Trobe Financial and Financial Standard.