Superannuation is undergoing profound changes this year with a raft of legislated policy that will touch all of us, including those running transport businesses.
On the 1 November 2021, Superannuation ‘Stapling’ will be introduced — a new system where superannuation follows a person from job to job.
When a person starts a new job and they have an existing super account, the new employer is tasked with finding their previous superannuation ‘stapled’ account via an ATO web portal.
We understand that the ATO is working on the process side, but for some months tracking down previous super accounts will be a clunky process for businesses. Keeping in mind that we can all make an ‘active choice’ and nominate a super fund or change anytime — so choice overrides ‘stapling’.
The change has been sold as a good-news story for its potential to stamp out duplicate accounts and prevent people whittling their super away on multiple fees. But stapling can have serious implications for people working in transport and logistics.
Insurance not fit for transport Many people rely on insurance – life (death cover) and Total and permanent Disability (TPD) – included (and paid from) their super fund, but when it comes time to claim, not all funds are equal.
A recent survey found that 40 per cent of super funds have occupational exclusion clauses, often relating to hazardous occupations.
If the job is classed as dangerous, some insurers just won’t pay a benefit, which is of deep concern for people and businesses operating in industries regarded as risky, including mining, building and of course transport.
In short, many of your people may have insurance cover in their super that is not fit for purpose.
This issue was highlighted in a recent media report of an interstate truck driver injured at work and was totally and permanently disabled.
Before the accident, his employer had signed him up to a superannuation fund which claimed to have a TPD payout of about $130,000. But after his injury the fund declined the claim, saying the policy excluded interstate truck drivers.
At TWUSUPER, our insurance covers people working in every transport occupation and was specifically designed for your people, and your industry. We need to do a better job of making people aware of this issue, and we will be doing just that.
As managers of businesses or people working in T&L, you may want to let your people know about this issue. For some, it may be one of the reasons they consider which super fund best suits their needs. We obviously have a bias in that respect, but it’s an important consideration as we paid out $58.5 million in claims last financial year alone.
The last financial year saw people stranded, but assets flying TWUSUPER delivered outstanding investment returns in 2020/21, with important changes lifting our overall performance and opening the door for strong growth in the years ahead.
In the year to 30 June, TWUSUPER’s Balanced (MySuper) investment option – the fund most members are invested in – delivered a return of 18.98 per cent, while the Equity Plus investment option delivered an impressive 25.72 per cent. Both returns are after tax and investment fees.
For those looking closer to retirement, the Balanced pension option returned 20.9 per cent for members, and the Equity Plus pension option 28.43 per cent. Returns are higher as pension accounts are not taxed.
These great numbers are mostly due to the fact that investment markets performed strongly over the past year, despite all the early warnings and fears for the global economy. But great returns for members are no accident.
TWUSUPER’s has performed well relative to other superannuation funds thanks to some standout performances by specialist managers working on members’ behalf, and the effects of an investment restructuring program we began early last year.
Some of the changes to TWUSUPER’s investment portfolio have been designed to better focus active management on those parts of the portfolio where we can add the most value, reduce investment costs, and better recognise the importance of Environmental, Social and Governance (ESG) in our ongoing investment decisions.
These changes have seen the TWUSUPER shift approximately a quarter of our assets – around $1.5 billion – across several investment managers, representing the largest strategic and transactional investment activity we have ever undertaken.
As part of our commitment to ESG, our new investment mandates specifically exclude companies involved in tobacco manufacturing, nuclear and civilian weapons manufacturing, and fossil fuel extraction such as thermal coal mining.
In other parts of our portfolio, TWUSUPER recently gained exposure to a range of cutting-edge industrial properties through a $90 million investment in the Charter Hall Industrial Property Fund.
Its warehousing sites include the state-of-the-art Woolworths Distribution Centre in Dandenong, Victoria, located on 15.9 hectares, and the MidWest Logistics Hub at Truganina in the same state.
When complete the 60-hectare MidWest Logistics Hub will host leading businesses including Toll, Coles, Uniqlo and Bridgestone.
At a time when the nation has faced economic turmoil and all the challenges thrown up by COVID-19, TWUSUPER has maintained its position as an industry leader, earning members more while keeping costs down.
At TWUSUPER, we are proud to support the people and businesses that have so tirelessly worked to keep Australia moving in these challenging times.
About the Author
Frank Sandy, CEO of TWUSUPER has been with the fund since 2005. His previous roles have involved managing both finance and human resources. Frank is a CPA and has a Degree in Business Studies in accounting as well as a wealth of experience in finance and superannuation.