Opinion: Super funds are not petty cash drawers

Oh, pity poor David Elia.

The chief executive of Hostplus, one of the nation’s biggest industry superannuation funds, apparently wishes he didn’t have to spend money on lavish dinners and swanky catering at the Australian Open.

But it turns out “everyone’s doing it”, so he too has to spend up big on entertainment to impress employers, or at least that’s what he’d like the banking royal commission to believe.

No doubt as the royal commission continues, we’re going to learn more about how the top end of town does business – and end up pretty disgusted with the whole system.

We have to ask why it is these people think it is so easy to spend others’ hard-earned money?

We’ve been hearing it for decades: Australia’s is an ageing population and there are less and less workers paying taxes to fund pensions, so future generations are going to have to take care of themselves.

Superannuation is touted as one of the safest and easiest ways to save for our twilight years; with a few dollars set aside every week building into a nest egg over decades of work.

Sadly though, it seems like those savings are being eyed as rich pickings for the very companies that have been given the job of keeping our money safe for our golden years.

We have to ask why it is these people think it is so easy to spend others’ hard-earned money?

Those overpriced corporation parties are only the thin edge of the wedge.

Evidence before the royal commission has revealed just how murky the whole sector actually is.

From the range of fees charged for services that were never delivered to the way in which some funds select board members, it’s pretty clear that a major overhaul of the whole sector is needed.

When a government talks about overhauling super, you can bet what they actually mean is that they’re inventing new ways of slurping up some extra cash to boost the budget bottom line.

But clearly what is needed is a back-to-basics overhaul that better protects members’ money.

Corporate catering and fees for never-delivered services are probably just the tip of the iceberg.

Governments cannot tell workers that pensions are an endangered species and that superannuation is the best way to plan for retirement, and then sit back while those very same funds are still vulnerable to mismanagement.

If, as David Elia would like us to believe, it is necessary for employers to be coaxed into signing up to a particular fund on the strength of schmoozing, then the solution surely is to regulate this kind of behaviour out of existence.

Current regulation designed to do just that appears to be routinely flouted.

Governments seem to be increasingly keen to enact legislation that’s for the community’s own good, so how about a genuine rethink on the best way of protecting people’s increasingly valuable asset?

The relationship between governments, big business and the financial sector has always been complicated.

Just look at how banks’ decision on interest rates can impact the wealth of the whole nation and, in turn, the federal budget.

Private companies exist to make a profit, we know that.

But surely when the government has made it mandatory for workers to be paid super, with an eye on being able to spend significantly less on pensions in the future, then that same government has an obligation to protect that money?

Without an overhaul, the government also runs the risk of people losing faith in the superannuation system.

Imagine how workers on modest wages feel when they find out their retirement funds are being raided for unnecessary administration fees and frittered away on pricey parties for highly paid corporate executives.

Where is the incentive to save that little bit extra, to go without now to ensure a better retirement, when your annual statement shows it has all gone to the fund manager?

New Commonwealth Bank boss Matt Comyn has admitted in an interview that the revelations at the royal commission “unquestionably” caused “reputation damage to the bank”.

He’s so right, and not just about about his own bank.

The whole financial sector has had its reputation called into question, and it’s going to take an enormous amount of work to rebuild trust.