Media Super

Media Super, like all industry super funds, appears to have come through the Royal Commission in good health. Among the blizzard of accusations of bad dealings and bad faith, the not-for-profit industry funds shone like a beacon. Print21 editor Wayne Robinson asks Media Super CEO Graeme Russell why that is.

Superannuation funds have been in the headlines recently – and not all those headlines have made pretty reading, as the Royal Commission into Banking, Superannuation and Financial Services shone the spotlight into the darker corners of the industry. However, while the retail funds run by the banks and the likes of AMP suffered a litany of distressing revelations during the course of the Commission, the industry super funds that appeared came out more or less unscathed from the hearings.

Sitting at the head of the printing industry’s super fund, Media Super, CEO Graeme Russell, now six years into the job, says industry funds generally have outperformed the retail funds. “There is a fundamental flaw, an irreconcilable conflict of interest with retail funds. They have to benefit both members and shareholders. Industry funds like Media Super have a single focus, and one stakeholder to satisfy: the member. All profits only go to members.

“Industry funds generally have a values based foundation, as we were established to act only in the interests of our members. We are working solely for our members,” he says.

The fallout from the Royal Commission has been spectacular, with members apparently abandoning retail funds in droves. Media Super alone has seen rollovers from other funds up by 60 per cent over the year before, and the final report is not even out yet.

The Media Super fund that Russell oversees is the industry fund for the printing industry, as well as the media and creative arts industries. Its 80,000 members have some $5.5bn in the fund. Russell points to its rankings as evidence of its well being. It is consistently among the top performers; in the last 12 months, for instance, it is ranked as the top performer in the SuperRatings SR50 –Balanced Options ratings table.

Not all print industry people are part of Media Super, although not surprisingly Russell believes those who are not should consider the Media Super option, especially if they are in a retail fund. He says there are three key reasons why print industry people should consider Media Super: performance, investment in print, and investment in the wellbeing of print people.

High performer

“First, according to SuperRatings, the performance of Media Super is strong. Our default MySuper product, the Balanced Option, has outperformed most retail funds used by major print employers for the last five years at least. Media Super’s My Super Balanced Option was ranked number one over the 12 months to November 30 last year,” he says.

Part of the reason why industry funds in general and Media Super in particular consistently perform better than retail funds is that they make large investments in unlisted infrastructure and commercial property assets, both here and overseas. These have consistently delivered near or above double-digit returns. Media Super is one of the owners of IFM Investors, which is a vehicle for investing in infrastructure owned by a collection of industry super funds. Similarly, it is also a part owner of ISPT (Industry Super Property Trust), and of ME Bank, both also owned by a collection of industry super funds.

“We have different asset allocations to the retail funds, and that has delivered superior performance over the medium to long-term,” says Russell. Industry fund members including those with Media Super also typically pay lower fees than retail funds, as they are not paying commissions or dividends.

According to Russell, the second reason why many printing industry people choose to invest through their industry fund, Media Super, is that it invests back into the industry. A retail fund has no vested interest in the print industry, whereas an industry fund does. “We are strong supporters of the PIAA and of many industry initiatives, from Print2Parliament to the National Print Awards, apprenticeships, and encouraging young people to join the industry,” he says.

“The third reason is that we are out there supporting people in the industry. For several years, for instance, we have offered print employers a mental health wellness programme, run by the industry funds’ own mental health foundation, Super Friend. Next year we will launch a financial wellbeing programme for our members: we will be visiting printers offering on-site training and education for financial health,” says Russell.

The Media Super fund also provides a tool to track people’s retirement projections, enabling them to see where they will end up and whether they need to take further action. Typically people approaching retirement will want to be thinking about salary sacrificing if they can, given that compulsory super has only been part of the working life for less than 25 years. Those at the beginning of their working life should be in a good position by the time they come to retire with 40 years or more of super payments.

Russell is proud of the mental wellness programme, which comes as part of industry and society accepting that mental health is not something to be brushed under the carpet and kept hidden, but is best dealt with in an open and non-judgemental way. Media Super is seeing an increasing number of claims through the Fund’s total and permanent disability (TPD) insurance based on mental health issues, and in fact it is now the number one reason people are claiming. “We want to be part of the solution that helps people before they get to that point and enables them to get help early, so they have a better chance of recovery and getting back to productive work,” says Russell.

Well balanced

The Media Super Board comprises 11 people: three from the PIAA, three from the AMWU, two from the Media Entertainment and Arts Alliance, one from Nine (formerly Fairfax), one from Live Performance Australia, and one independent. Russell reports to the Board, and his senior management team consists of himself, a chief operating officer, a general manager of investments, a general manager of engagement, and an HR manager.

The $5.5bn fund has 80,000 members, and 13,000 employers making contributions, with the print industry the biggest sector; however, not everyone in print is a member, in fact far from it. A number of larger printing companies still use bank-owned or AMP corporate funds, almost all of which are delivering lower returns than Media Super.

Media Super offices are located in mainland state capital cities, with around 30 full time staff working for the fund. The call centre and admin are outsourced to Mercer, in common with most of the mid to small sized industry funds.

Russell himself has previous form in print: while he was studying at university he worked his way through in a phototypesetting trade house, which contracted out to local newspapers and magazines. A business degree and a chartered accountancy qualification took him eventually to the CEO of another industry fund, before he took the role at Media Super in 2013.

Print’s transition

After six years at the head of Media Super, Russell is in a good position to assess the print industry, which he says is in transition. “The notion that print is dead or dying is clearly far from the truth. What is happening is that print is in a period of rapid change. There will always be challenges with change. As I see the landscape, the bigger companies are well underway in their transformation programmes, and so are some but not all of the smaller companies. I’m not sure all of them will make the transition successfully. Some sectors clearly have a bright future: outdoor print for instance, as well as packaging and personalised print; others, envelopes for instance, have a less secure outlook.”

With the nation’s super funds holding trillions of dollars, is Russell concerned about the government raiding the coffers through some form of taxation? “I think not, although there could be a rebalancing. At present the tax on super favours the higher income earners, and that does need addressing.”

On the issue of governance, Russell and the other industry fund leaders are resisting government attempts to change the rules to bring them into line with the retail funds, pointing out it hasn’t exactly worked well with the retail funds.

Advancing women

One area that Media Super is especially concerned about is super and women. Under the current system women are disadvantaged, primarily because of their time out of the workforce during the childbearing and child rearing years. They also generally have lower wages, which translates into lower super. Russell wants changes. “We would like to see super continue to be paid when a woman is on paid parental leave. We also want to see it paid when people earn less than $450 a week, which is the current lower limit. Some of our members in the entertainment world may have some weeks when they are on low pay for one reason or another. It is simply not fair their employer does not have to pay super because they are not earning so much.”

Strong position

Super is a crucial part of the working life, and its guardians have a big responsibility. The message from Russell for people in the print industry is that Media Super is in a strong position and is consistently delivering a solid investment return. It has low fees and is focused on its members, while working for the good of the entire industry.