Response

(Publication date)

Responses to questions 1 - 61

(22 May 2020)(PDF328KB)

For the past five years the total value in dollars and as a percentage of the total value of a fund:

a. Listed investments

b. Unlisted investments

c. Total investments.

For the past five years the total value in dollars and as a percentage of the total return for the fund:

a. Listed investments

b. Unlisted investments

c. Total investments.

Details of each individual asset currently held at a value other than available listed market prices (an unlisted asset) wholly owned by the fund or funds under your control, including:

a. The asset name and location.

b. The frequency of the revaluation of the asset.

c. The most recent valuation.

d. A copy of that valuation.

e. The methodology used for its valuation.

f. Whether the valuation was completed internally or externally.

g. The details of any external party involved in the valuation.

Details of each individual asset currently held at a value other than available listed market prices (an unlisted asset) partly owned by the fund or funds under your control, including:

a. The asset name and location.

b. The frequency of the revaluation of the asset.

c. The most recent valuation.

d. A copy of that valuation.

e. The methodology used for its valuation.

f. Whether the valuation was completed internally or externally.

g. The details of any external party involved in the valuation.

Details of costs for advertising campaigns for the past five years, including:

a. The companies invited to tender for all or parts of any advertising campaign.

b. The companies awarded campaigns.

c. The total cost of each campaign.

d. The cost of the campaign’s development.

e. Broadcasting (television, radio and internet) and publishing costs.

f. Assessment reports of the efficacy of campaigns in either retaining or gaining new members.

Over the last five financial years:

a. What is the total budget for all costs associated with the fund?

b. What were the total assets under management?

c. What are the total number of employees?

d. What are the total number of contractors?

e. What are the total number of externally hired contracts, and their value?

Over the last five financial years:

a. What is the total number of member accounts?

b. What is the total increase in the number of members as a result of the fund’s default status?

c. What is the total increase in the number of members through voluntary adoption or switching?

d. What was the average member balance?

e. What was the average dollar amount deducted in insurance fees per member, across all fund products in dollar terms and as a share of a member account?

f. What was the total number of inactive accounts? (Please use the APRA definition: no contributions for two years)

Over the last five financial years:

a. What was the average dollar amount deducted for administration and asset management fees per member, across all fund products? (please do not include insurance fees)

b. What was the cost (%) of fund administration expenses as a proportion of funds under management?

c. What was the total cost of in-house administration expenses?

d. What was the cost of in-house administration expenses as a proportion of funds under management?

e. What was the total cost of any external administration expenses?

f. What was the cost of any external administration expenses as a proportion of funds under management?

g. What was the total cost of any external administration expenses to Related Parties?

h. What was the cost of any external administration expenses to Related Parties as a proportion of funds under management?

i. How many staff are employed in roles considered part of the administrative cost?

Over the last five financial years:

a. The number of rollover requests that the fund did not pay out to another fund for each year?

b. The average dollar value of a rollover for each year?

c. The value of any clawback accounts and/or funds held that is used to hold funds between financial years?

a. Does the fund maintain a reserve at least partially funded through insurance premiums, rebates from an insurance company (such as profit share arrangements) or tax benefits that have arisen from insurance?

b. The total value of that reserve?

c. The total value of tax rebates received from the ATO on insurance premiums?            

In the context of building investments:

a. Have you completed assessments of the prevalence of flammable cladding across some properties?

b. Have you completed assessments of the prevalence of flammable cladding across all properties?

c. Have you taken any remediation to reduce your exposure to risk to identify flammable cladding, and if so, what?

d. Have you taken any remediation to reduce your exposure to risk to remove flammable cladding, and if so, what?

e. Do you hold any properties where insurance has been refused or are uninsured due to defective building construction such as cladding?

Governance:

a. How many trustee board members did the fund have?

b. What was the total salary of all trustee board members?

c. What was the average salary of all trustee board members?

d. Are there any performance-based assessments that determine trustee board remuneration, and if so what are they?

e. What was the salary of the trustee board chair?

f. What was the average length of service of all trustee board members?

g. What is the length of service of the longest serving trustee board member?

h. Are trustee board members asked whether they have conflicts of interest at each meeting, and if not, why not?

i. What is the conflict of interest policy for trustee board members?

j. Does your fund have a policy on gender diversity and/or balance for listed companies?

k. Does your board have gender balance?

In the context of the ACCC’s legal action and question for competition in monopoly infrastructure entities:

a. What are the implications for infrastructure investment returns if the ACCC is successful in its legal action?

b. Have you analysed your infrastructure investment portfolio to examine the risk of ACCC action to reduce anti-competitive monopoly of oligopoly pricing?

c. If so, can you provide details of the likely impact, and what is the project impact on revenue and income?

In dollar terms, for each of your superannuation products, can you please provide annual data for the past five financial years on average, for a member with a balance of $6,000, $50,000 and $150,000?

a. Investment fees

b. Administration fees

c. Indirect costs

d. Any other cost to a member which is incurred or foregone by way of a lesser return pre-unit price (but not included in the indirect cost ratio) including any other costs, charges, fees, direct or indirect benefits including any benefit by way of rebate, set-off, commission, in-kind, tax credit/offset retained, interest (or interest rebate) retained by any party involved in the management, custody, review, compliance, administration, servicing, asset consulting, valuation, operation and maintenance, financing, auditing, brokerage, execution, settlement, or otherwise of the assets in the fund, or their underlying assets.

e. An aggregate total of all fees mentioned above.

As a percentage of the value of the member account, for each of your superannuation products, can you please provide annual data for the past five financial years on average, for a member with a balance of $6,000, $50,000 and $150,000?

a. Investment fees

b. Administration fees

c. Indirect costs

d. Any other cost to a member which is incurred or foregone by way of a lesser return pre-unit price (but not included in the indirect cost ratio) including any other costs, charges, fees, direct or indirect benefits including any benefit by way of rebate, set-off, commission, in-kind, tax credit/offset retained, interest (or interest rebate) retained by any party involved in the management, custody, review, compliance, administration, servicing, asset consulting, valuation, operation and maintenance, financing, auditing, brokerage, execution, settlement, or otherwise of the assets in the fund, or their underlying assets.

e. An aggregate total of all fees mentioned above.

For the past five years:

a. What was the total cost of all advertising and/or marketing?

b. What was the total cost of all advertising and/or marketing per member?

c. What was the total cost of all advertising per new (FY19) member?

d. What was the total cost of all television advertising and/or marketing?

e. What was the total cost of all radio advertising and/or marketing?

f. What was the total cost of all print advertising and/or marketing?

g. What was the total cost of all online advertising and/or marketing?

h. How many in-house staff are employed in advertising and marketing roles?

i. How much was spent on engaging external advertising and marketing consultants?

j. Do you advertise and/or directly financial contribute to the New Daily?

How much money have you spent on advertising on the following platforms in the past decade:

a. Google?

b. Facebook?

c. Twitter?

d. Instagram?

e. A non-Google search engine?

f. Any social media platform that is not mentioned in (b) – (d)?

Can you provide details if you have purchased the following over the past decade:

a. Google advertisements

b. Google search terms.

How will the overall fund performance be affected if:

a. The income return of unlisted assets declines?

b. The fund can no longer purchase unlisted assets onshore?

c. The fund can no longer purchase unlisted assets offshore?

Valuation methodologies:

a. Have you compared your valuation methodologies and assumptions for unlisted assets with other superannuation funds, and if so, what are the differences?

b. Are you confident that your valuation methodologies and assumptions for unlisted assets reflect their value to the fund, and how often are they reviewed?

c. How do you compare your valuations to listed investments, including, but not limited to, whether there is a cross check to stock prices for similar assets?

d. Have you ever calculated whether there would be a difference between valuations if unlisted assets were listed?

a. How many unlisted assets do you hold in the fund?

b. What value share are unlisted assets of the fund’s:

i. total value?
ii. total property value?

Discount rates:

a. For unlisted assets, do you use a consistent discount rate for income across all unlisted assets, or an asset-specific discount rate?

b. What is the discount rate you apply to the income from unlisted assets, and has it changed over the past decade, and if so, when and why?

Over the past decade:

a. Have you ever devalued an unlisted asset?

b. Have you ever devalued an unlisted asset by more than $10 million?

c. Have you ever devalued an unlisted asset by more than $50 million?

d. Have you ever devalued an unlisted asset by more than $100 million?

e. Please advise the companies and/or individual valuers that have valued your unlisted assets.

For each year of the past decade:

a. How many superannuation customers do you have?

b. How many financial planners do you have in total numbers, and as a superannuation customer to financial planner ratio?

c. How many financial advisers do you have in total numbers, and as a superannuation customer to financial planner ratio?

For each year of the past decade:

a. How much is charged for financial planning annually to fund members, and what is the average per superannuation customer?

b. How much is charged for financial planning annually to funds, and what is the average per superannuation customer?

c. How much is charged for financial advice annually to fund members, and what is the average per superannuation customer?

d. How much is charged for financial advice annually to funds, and what is the average per superannuation customer?

For each year of the past decade:

a. What is the cost of general advice annually, and what is the average per superannuation customer?

b. What are the aggregate value of bonuses provided for general advice, and what is the average per adviser?

For each year of the past decade:

a. What is the cost of scaled advice annually, and what is the average per superannuation customer?

b. What are the aggregate value of bonuses provided for scaled advice, and what is the average per adviser?

For each year of the past decade:

a. What is the cost of comprehensive advice annually, and what is the average per superannuation customer?

b. What are the aggregate value of bonuses provided for comprehensive advice, and what is the average per adviser?

For each year of the past decade:

a. What is the cost of intra-fund advice annually, and what is the average per superannuation customer?

b. What are the aggregate value of bonuses provided for intra-fund advice, and what is the average per adviser?

Over the past five years:

a. How many employees have been cautioned for misconduct?

b. How many employees have had a penalty (such as, but not limited to, loss of bonus) for misconduct?

c. How many employees have been terminated for misconduct?

d. How many employees have been cautioned for misconduct, as a share of all employees over that timeframe?

e. How many employees have had a penalty (such as, but not limited to, loss of bonus) for misconduct, as a share of all employees over that timeframe?

f. How many employees have been terminated for misconduct, as a share of all employees over that timeframe?

Responses to questions 62 - 71

(17 June 2020)
(PDF35KB)

Listed companies holding infrastructure assets have had write downs of around 40 per cent:

a. How does this compare to your write down of unlisted assets?

b. If there is a difference, why is there a difference?

Have you had any liquidity issues in honouring your obligations to members as a result of the:

a. recent decline in the share market?

b. permission by the Federal government to allow members to remove up to $10,000 per financial year if they lose their job?

Liquidity management:

a. What is your fund’s process for complying with APRA’s prudential framework which requires trustees to have a liquidity management plan?

b. How is the plan being reported to the trustee directors?

c. Who is responsible for the day-to-day liquidity management for the fund?

Since 12 March 2020, has your fund provided any liquidity to:

a. REST?

b. Hostplus?

c. any other superannuation fund?

If so, for each fund, can you provide details of the amount, the date and the terms?

Responses to questions 72 - 85

(14 August 2020)
(PDF129KB)

Since 12 March 2020, has your fund loaned any cash to:

a. REST?

b. Hostplus?

c. any other superannuation fund?

If so, for each fund, can you provide details of the amount, the date and the terms?

Regarding any investments you have with IFM Investors, please provide the following:

a. The capital invested each year for the past five years.

b. The accumulated valuation of investments for the past five years.

c. The dividends received from those investments for the past five years.

Regarding any investments you have with ME Bank, please provide the following:

a. The capital invested each year for the past five years.

b. The accumulated valuation of investments for the past five years.

c. The dividends received from those investments for the past five years.

If you are an investor in ME Bank, have you individually (or in collaboration with other funds), ever commissioned reports into its valuation in the past decade?

a. And if so, how many reports and in what year?

b. Were any commissioned to be completed by the UK-based group, LEK?

c. And please provide copies.

According to reports in the Australian Financial Review superannuation fund, Hostplus, redefined the definition of ‘illiquid assets’ (‘Hostplus warned of liquidity “perfect storm”’, Australian Financial Review, 18 May 2020). Therefore, can you please advise:

a. How you define ‘illiquid assets’ within your fund, including details of holdings and timeframes?

b. How you define ‘liquid assets’ within your fund, including details of holdings and timeframes?

c. How long each of these definitions have been used?

d. What prompted any switch to these definitions?

e. What the prior definitions were before any switch?

Have you completed a skills audit in the past five years of the following:

a. Your board of directors?

b. Your investment committee?

c. And if not, why not?

d. And if so, presently what gaps are identified?

Prior to appointment, have employees fulfilling fiduciary roles had their investment performance track record assessed before fees?

a. And if not, why not?

b. And if not prior to appointment, have they following appointment?

c. And if so, on what timeframe?

Do you currently have an art collection?

a. If so, can you advise its current valuation?

b. If so, can you advise where it is stored and/or exhibited?

Do you engage proxy advisers?

a. What are the terms of engagement for proxy advisers?

b. To what extent are they empowered to act on behalf of the entity?

c. Does their advice get provided to the board?

d. How often is advice submitted to the board?

e. Is their advice formally adopted by the board?

f. Are their positions publicly stated?

g. How does the board assess these positions concurrent with their duties as trustees and the sole purpose test?

Are you currently, or have you previously been, a member or subscriber of the ACTU Members Connect Program?

a. If so, what is the timeframe of your membership?

b. What has been the annual fee year-on-year?

c. How have you assessed its value to your members?

Responses to questions 86 - 122

(19 August 2020)
(PDF110KB)

Please provide a list of all investment schemes across your fund(s) that have had their redemptions frozen since January 2008, and for each:

a. What was the total value of funds frozen?

b. How many of your members were impacted by these frozen funds, and how?

c. The date on which the freeze was implemented and lifted.

d. A copy of the clause trustees relied on to enact that freeze.

Since 1 January 2020, have you, or any entities you control:

a. suspended any successor fund transfers?

b. had any funds involved in impending merger activity frozen by investment managers?

Mortgage trusts

a. Do you, or any entities that you control, have mortgage trusts on your platform?

b. Will you need to freeze redemptions on these due to leverage?

Property trusts and assets

a. Do you, or any entities you control, have listed property trusts on your platform?

b. How have these performed in comparison to direct unlisted property assets owned by your fund between 1 January 2020 and 20 April 2020?

Do you, or any entities you control, have agribusiness schemes on your platform?
If so, what was the nominal value of these investments on:

a. 1 January 2020?

b. 20 April 2020?

Managed investment schemes

a. What policies and governance structures do you, or any entities you control, have in place to determine what managed investment schemes are added to your investment platforms? (Please also provide a copy of these policies.)

b. Do you, or any entities you control, allow financial advice dealer groups to add managed investment schemes to your platform and/or recommended product lists?

APRA supervision of investment governance

a. Please describe APRA’s current supervision of your investment governance.

b. When did APRA last examine your investment governance processes?

c. Has APRA asked you to stress-test particular types of managed investment schemes? If so, what types?

Rent for tenancies during COVID-19

a. Can you please advise what action you, or any entities you control, have taken to defer the payment of rent for tenancies for listed and/or unlisted assets owned by your fund during the COVID-19 pandemic?

b. To what dollar value has that reduced revenue to your fund since 1 February 2020?

Can you please advise what exposure your members have to listed property trusts and the value of those asset holdings on:

a. 1 January 2020?

b. 25 April 2020?

Can you please advise what exposure your members have to listed mortgage trusts and the value of those asset holders on:

a. 1 January 2020?

b. 25 April 2020?

How many sexual harassment complaints have been lodged against your company in the last five years?
For each complaint, please set out:

a. the jurisdiction

b. how the complaint was resolved, and

c. the remedies ordered or settlement amount.

In the context of understanding the value of your services to Australian superannuation members, can you please advise the remuneration package for your Chief Executive; specifically:

a. base salary

b. annual bonuses

c. the accumulated value of deferred bonuses unpaid

d. the accumulated value of deferred bonuses paid

e. any other annual, bonus or deferred remuneration information or settlements not covered in the previous four points, and

f. reimbursements for expenses.

Please provide copies of your:

a. annual report for the past five years, and

b. company structure.

(19 August 2020)

Attachment 1
(PDF4,913KB)

Attachment 2
(PDF1,152KB)

Attachment 3
(PDF3,217KB)

Attachment 4
(PDF3,187KB)

Attachment 5
(PDF1,305KB)

Attachment 6
(PDF774KB)

Does your company have a relationship with the:

a. Business Council of Australia?

b. Financial Services Council?

c. Australian Financial Markets Association?

d. Institute for Public Affairs?
If so, please provide details of any amounts paid to each group.

Are any commissions paid to employees?
If so, please provide:

a. Details of these commission arrangements.

b. The total amount of commissions paid for each of the last five years.

c. The conflicts of interest policy for managing these commission arrangements.

In the context of corporate governance, can you please provide for board directors (based or located in Australia or elsewhere) for the past five years:

a. A list of the Board members and their biographies.

b. De-identified total remuneration for each Board director.

c. De-identified disaggregated remuneration for each Board Director, including:

i. Base salary.
ii. Annual bonuses.
iii. The accumulated value of deferred bonuses unpaid.
iv. The accumulated value of deferred bonuses paid.
v. Any other annual, bonus or deferred remuneration information not covered in the previous four points.
vi. Reimbursements for expenses.

Self-managed super funds

a. Can you please advise whether you manage funds for SMSFs?

b. Have you allowed individuals and/or SMSFs to co-invest alongside your investments?

c. Do you allow individuals and/or SMSFs to co-invest alongside your investments?

Please advise whether you manage funds for:

a. family trusts?

b. trusts?

c. registered organisations, and if so which registered organisations?

Managing money for related parties

a. Do you manage money for any related parties, whether superannuation funds or otherwise?

b. If so, which organisations or entities?

c. In relation to these organisations or entities:

i. Are you aware whether those related parties have assessed the value of these arrangements, relative to best-practice arms-length arrangements available elsewhere, in terms of generating returns for members?
ii. Please provide your conflicts of interest policy for managing related party arrangements.
iii. Please provide your risk management approach for related party arrangements including line 1, line 2 and line 3 roles.

Please provide the number of clients by funds under management on behalf of each client, in the following ranges:

• <$20 million
• $20 million - $50 million
• $50 million - $100 million
• $100 million - $1 billion
• >$1 billion.

Please list the individual private clients under management (including family trusts) for the following ranges:

• <$20 million
• $20 million - $50 million
• $50 million - $100 million
• $100 million - $1 billion
• >$1 billion.

If you are an investor in any banking institution, have you individually as a fund (or in collaboration with other funds), ever commissioned reports into its valuation in the past decade?

a. If so, how many reports and in what year?

b. Please provide copies.

Please provide details of the process you apply for assessing voting at annual general meetings of listed companies, including:

a. The committee appointed to make decisions.

b. The committee membership.

c. Whether that committee reports to the board.

d. What principles guide decision making.

e. Whether there is a report to the board about decisions made.

f. Whether decisions are made based on the objectives of improving capital value, or social or environmental priorities.

In the context of your board:

a. What is the process for board appointments?

b. Is there a skills matrix completed before board appointments?

c. Are any of your shareholders entitled to appoint directors?

d. How, if at all, are shareholders represented to the board?

e. How, if at all, are shareholders represented within the company?

(19 August 2020)

Attachment 1
(PDF84KB)

Attachment 2
(PDF74KB)

Please provide the titles of all externally commissioned reports over the past five years that have reviewed any of the following:

a. Performance of funds.

b. Investment strategies for funds.

c. Conflicts of interest for funds.

For each fund where more than 30 per cent of capital is managed by another entity, please complete the below table including:

a. The name of the fund.

b. The allocation of capital as a percentage of the total capital held by the fund.

c. The allocation of capital of the total capital held by the fund.

d. The entity managing the capital.

e. Whether you are a shareholder in that entity.

Please provide details of the following reduction to remuneration packages since 11 March 2020:

a. Board members.

b. The chief executive.

c. Executive management.

(19 August 2020)

Attachment 1
(PDF4,302KB)

Since 1 January 2020, for each fund, please outline:

a. The date and value at the highest valuation of the fund?

b. The date and value at the lowest valuation of the fund?

c. The number of business days between the highest and lowest valuation for the fund?

d. The nominal value between the highest and lowest valuation for the fund?

e. The percentage value between the highest and lowest valuation for the fund?

f. The number of business days between the date of the ASX’s lowest valuation, and the lowest day for the valuation of the fund?

g. The number of business days between the date of the ASX’s lowest valuation, and the lowest valuation of unlisted assets in the fund?

h. What volume of switching of investments occurred between funds between the highest and lowest valuations?

i. What volume of switching between funds occurred in that time by trustees of the fund that are also members of the fund, between the highest and lowest valuations?

j. What volume of switching between funds occurred in that time by executives of the fund that are also members of the fund, between the highest and lowest valuations?

k. What volume of switching between funds occurred in that time by other employees of the fund that are also members of the fund, between the highest and lowest valuations?

l. What integrity measures were taken to prohibit trustees, executives and employees switching between funds from taking advantage of arbitrage of any gap between the lowest valuation date of the ASX and any revaluation of the fund?

Responses to
questions 123 - 127

(16 September 2020)
(PDF18KB)

On financial advisers providing non-intrafund advice (i.e. comprehensive advice - beyond the scope of intrafund advice) within the fund over the past five financial years:

a. How many do you employ (or are you paying for through outsourced arrangements)?

b. What is the revenue generated from these non-intrafund advisers?

c. How many financial advisers within the fund also provide intrafund advice?

d. If you have non-intrafund financial advisers within the fund also providing intrafund advice, how is their remuneration determined from different sources?

e. Is there any cross-subsidisation for non-intrafund financial advisers within the fund from activities funded through intrafund advice?

f. Is there any cross-subsidisation for financial advisers from intrafund advice to non-intrafund financial advisers within the fund?

g. What is the total budgeted cost and actuals for financial advisers?

h. What is the remuneration level/range for the financial advisers employed to provide non-intrafund advice to your members?

i. What is the aggregated cost of their remuneration?

ii. What is the aggregated cost for their employment?

iii. What is the aggregated cost for their on-costs, including but not limited to, superannuation, leave, training support and office space?

iv. What is the aggregated cost for marketing their services?

v. What is the aggregated cost for administrative support services?

vi. What is the aggregated cost for professional insurance and indemnity?

vii. What is the aggregated cost for compliance oversight?

viii. What is the aggregated cost for legal oversight?

ix. What is the aggregated cost for other regulatory oversight?

x. What is the aggregated cost for the unit, including overheads, that provides financial advice within the fund?

On financial advisers providing intrafund advice (i.e. strictly limited to advice on your super fund for the member only - not spouse) within your fund over the last five financial years:

a. How many do you employ (or are you paying for through outsourced arrangements)?

b. What is the remuneration level/range for the financial advisers employed to provide intrafund advice to your members?

i. What is the aggregated cost of their remuneration?

ii. What is the aggregated cost for their employment?

iii. What is the aggregated cost for their on-costs, including but not limited to, superannuation, leave, training support and office space?

iv. What is the aggregated cost for marketing their services?

v. What is the aggregated cost for administrative support services?

vi. What is the aggregated cost for professional insurance and indemnity?

vii. What is the aggregated cost for compliance oversight?

viii. What is the aggregated cost for legal oversight?

ix. What is the aggregated cost for other regulatory oversight?

x. What is the aggregated cost for the unit, including overheads, that provides intrafund advice?

c. What is the revenue that intrafund advisers have generated?

d. How many financial advisers providing intrafund advice also provide it within the fund?

e. If you have financial advisers providing intrafund advice also providing it within the fund, how is their remuneration determined from different sources?

f. Is there any cross-subsidisation for financial advisers providing intrafund advice from revenue funded through activities within the fund?

g. What is the total budgeted cost and actuals for the intrafund advice unit?

h. What is the revenue generated from these financial advisers?

i. Within your fund, is there any cross-subsidisation for intrafund advice services?

Do you allow members to use their funds to pay for:

a. Financial advice?

b. Internal financial advisers?

c. External financial advisers?

Please advise the total remuneration package of your:

a. company secretary, and

b. Chief Executive Officer, including:

i. total remuneration

ii. base salary

iii. annual bonuses

iv. deferred bonuses

v. equity or other options

vi. additional compensation not covered in the above.

Responses to questions 128 - 146

(3 November 2020)
(PDF115KB)

For each year of the past decade, please advise the:

a. annual remuneration of the average worker who contributes to your fund

b. average annual superannuation contribution from an employee to your fund

c. multiple your CEO is remunerated compared to the annual remuneration of the average worker who contributes to your fund.

In the context of marketing and advertising campaigns:

a. How many is your fund currently running individually, or in collaboration with others?

b. How many have run, or are currently running since the beginning of calendar year 2020?

c. What is the actual cost for each campaign (including development, production, broadcasting, and distribution) to 30 June 2020?

d. What is the actual cost for each campaign (including development, production, broadcasting, and distribution) budgeted?

e. What is the budgeted cost for each campaign (including development, production, broadcasting, and distribution) from 1 July 2020 – 31 December 2020?

f. What is the budgeted cost for any existing or proposed campaigns (including development, production, broadcasting, and distribution) for the period 1 January 2021 – 30 June 2021?

g. What is the budgeted cost for any existing or proposed campaigns (including development, production, broadcasting, and distribution) for the period 1 July 2021 – 31 December 2021?

For each of the following categories, please provide the percentages of employees that are women, men, or who identify otherwise:

a. all employees

b. non-executive employees

c. executive employees

d. senior executive employees.

Do you have a target for the employment of:

a. women as a share of:

i. all employees?

ii. executive employees?

iii. senior executive employees?

b. people who are gender non-binary as a share of:

i. all employees?

ii. executive employees?

iii. senior executive employees?

Since the introduction of Superstream, which has standardised the transfer of funds, has there been:

a. A reduction in the cost to the fund for transferring funds, and if so, by how much?

b. A reduction in the fees charged to members reflecting any saving, and if so, by how much?

Greenhouse gas emissions

a. Does your fund have an internal target for your own greenhouse gas emissions footprint by:

i. 2030?

ii. 2035?

iii. 2040?

iv. 2045?

v. 2050?

b. Does your fund have a target for reducing greenhouse gas emissions from investments by:

i. 2030?

ii. 2035?

iii. 2040?

iv. 2045?

v. 2050?

c. Does your fund intend to divest from investments if they do not reach their greenhouse gas emissions reduction targets by:

i. 2030?

ii. 2035?

iii. 2040?

iv. 2045?

v. 2050?

Attachment

(3 November 2020)
(PDF9KB)

The New Daily

a. Have you ever completed a cost benefit analysis of The New Daily to your fund?

i. If so, when did you complete this cost benefit analysis?

ii. Please provide a copy of the cost benefit analysis.

b. Have you ever completed a cost benefit analysis of The New Daily to your members?

i. If so, when did you complete your cost benefit analysis of the New Daily to your members?

ii. Please provide a copy of the cost benefit analysis.

Financial advisers remuneration

a. Are your financial advisers paid:

i. a base salary?

ii. non-salaried remuneration, including bonuses?

b. Are your financial advisers, who are only remunerated with a base salary, eligible to provide:

i. personal advice?

ii. general advice?

Have any technology innovations within the fund reduced the cost of operating the fund over the past decade?

If so, please outline:

a. the technological innovations

b. the cost saving

c. the cost saving passed through to fees charged to members.

Valuations

a. What data is provided to valuation teams to assess the value of unlisted assets?

b. When the fund provides data to valuation teams to assess the value of unlisted assets, does this include internal modelling of asset valuations?

c. What assumptions are provided to valuation teams when assessing the value of unlisted assets?

d. When valuation teams assess the value of unlisted assets, do they solely take account of past performance?

e. When valuation teams assess the value of unlisted assets, what weighting do they take on the projected value of the market for such unlisted assets to inform their valuations?

f. For the past decade can you please complete the table for each unlisted asset valued under your valuation policy.

Over the past decade, how many non-disclosure agreements have you agreed to in relation to:

a. human resources issues?

b. sexual harassment issues?

Do you use an internal clearing house to receive the superannuation payments from employers, or their payroll representatives, before they are allocated to an individual member’s account and/or fund?

If so:

a. What is the name of the clearing house?

b. Why do you use a clearing house?

c. How much does it cost annually to use the clearing house?

d. How much does it cost annually to each member to use the clearing house?

e. What happens to interest accrued from funds held in the clearing house?

f. What happens to non-interest income and/or capital gains accrued from funds held in the clearing house?

Do you use an external clearing house to receive the superannuation payments from employers, or their payroll representatives, before they are allocated to an individual member’s account and/or fund?

If so:

a. What is the name of the clearing house?

b. Who owns the clearing house?

c. Why do you use an external clearing house?

d. How much does it cost annually to use the external clearing house?

e. How much does it cost annually to each member to use the external clearing house?

f. What happens to non-interest income and/or capital gains accrued from funds held in the external clearing house?

If you use an internal clearing house please outline when money is received into the clearing house:

a. On average, how long does it stay in the clearing house before it:

i. is allocated to a member’s account and/or fund?

ii. is allocated to purchase units for a member’s account and/or fund?

iii. appears in a member’s account and/or fund statement and/or online record?

b. What is the longest time that it has stayed in the clearing house before it:

i. is allocated to a member’s account and/or fund?

ii. is allocated to purchase units for a member’s account and/or fund?

iii. appears in a member’s account and/or fund statement and/or online record?

c. What is the shortest time that it has stayed in the clearing house before it:

i. is allocated to a member’s account and/or fund?

ii. is allocated to purchase units for a member’s account and/or fund?

iii. appears in a member’s account and/or fund statement and/or online record?

d. For interest accrued from holding funds in the clearing house for the member, is it then subsequently allocated to:

i. the individual member’s account and/or fund?

ii. a different account and/or fund? If so, what is its name?

e. For non-interest income and/or capital gains accrued from holding funds in the clearing house for the member, is it then subsequently allocated to:

i. the individual member’s account and/or fund?

ii. a different account and/or fund? If so, what is its name?

If you use an external clearing house please outline when money is received into the clearing house:
a. On average, how long does it stay in the clearing house before it:

i. is allocated to a member’s account and/or fund?

ii. is allocated to purchase units for a member’s account and/or fund?

iii. appears in a member’s account and/or fund statement and/or online record?

b. What is the longest time that it has stayed in the clearing house before it:

i. is allocated to a member’s account and/or fund?

ii. is allocated to purchase units for a member’s account and/or fund?

iii. appears in a member’s account and/or fund statement and/or online record?

c. What is the shortest time that it has stayed in the clearing house before it:

i. is allocated to a member’s account and/or fund?

ii. is allocated to purchase units for a member’s account and/or fund?

iii. appears in a member’s account and/or fund statement and/or online record?

d. For interest accrued from holding funds in the clearing house for the member, is it then subsequently allocated to:

i. the individual member’s account and/or fund?

ii. a different account and/or fund? If so, what is its name?

e. For non-interest income and/or capital gains accrued from holding funds in the clearing house for the member, is it then subsequently allocated to:

i. the individual member’s account and/or fund?

ii. a different account and/or fund? If so, what is its name?

In reference to the original publication of the article ‘CEOs push to reopen faster’ in the Australian Financial Review on 20 October 2020 which states:

Meanwhile, restaurateur Chris Lucas, pub owner and former AFL player Paul Dimattina and CSL chairman Brian McNamee all spoke of repercussions from elements of the labour movement for criticising the state government over the failures which led to the crisis and the subsequent slow pace of reopening the economy. Union-aligned industry superannuation fund managers have pressured Dr McNamee to stop his outspoken criticisms of the state government lockdown, even though he has repeatedly said he is speaking in a personal capacity and not for the company.

In the context of confronting, bullying or intimidatory workplace cultures, please advise:


a. has the Chair of your fund been in contact through any medium with Dr McNamee or his office since 5 August 2020, and if so please advise the name of the person who made contact and the nature of any communications.

b. have board members of your fund been in contact through any medium with Dr McNamee or his office since 5 August 2020, and if so please advise the name(s) of the person(s) who made contact and the nature of any communications.

c. has the CEO of your fund been in contact through any medium with Dr McNamee or his office since 5 August 2020, and if so please advise the name of the person who made contact and the nature of any communications.

d. have senior executives of your fund been in contact through any medium with Dr McNamee or his office since 5 August, and if so please advise the name(s) of the person(s) who made contact and the nature of any communications.

Mr FALINSKI: Mr Bryant, my first question is: the Hayne royal commission made adverse findings against Mercer on the basis that you had declined to fully inform your clients in order to maintain your earnings or revenue stream. What have you done to correct that or did you in fact need to correct it?

Mr Bryant: If I can address that in two areas, the royal commission made no finding of misconduct against Mercer but there was a matter that Mercer noted, which is the matter you've raised, to the royal commission in a case study of conduct that in our view fell below community expectations, and Commissioner Hayne in his report agreed with that assessment. There've been a number of initiatives that have been undertaken within Mercer as a consequence of that.

Mr FALINSKI: Mr Bryant, can I interrupt you there? Who reported it to the royal commission?

Mr Bryant: I would have to take that on notice. Mercer, along with other firms, provided a range of information to the royal commission. Questions came

Mr FALINSKI: So you may have self-reported that to the royal commission?

Mr Bryant: As I understand it, there was a matter raised in the media in regard to this incident which involved Mercer, and that was the basis on which it came to our knowledge and, as I understand it, the royal commission's knowledge as well. But if I could clarify that for you on notice, if that's particularly relevant for you, I can do so.

Mr FALINSKI: Yes. I would find that very helpful, the genesis of how that information came to be reported to the royal commission. It would be very interesting.

Hansard pp. 45-46

6 November 2020

Responses to questions 148 - 152

(10 December 2020)
(PDF21KB)

Hansard p. 49

6 November 2020

Hansard p. 50

6 November 2020

Hansard p. 53

6 November 2020

Hansard p. 54

6 November 2020

In dollar terms, how much advertising space did your fund book (directly or indirectly through a broker or agent) in the second half of 2020 that was unused on:

a. radio?

b. television?

c. print?

Responses to questions 153 - 166

(9 April 2021)
(PDF34KB)

In minutes, how much advertising space did your fund book (directly or indirectly through a broker or agent) in the second half of 2020 that was unused on:

a. radio?

b. television?

c. print?

What is your current policy on whether your funds are permitted to invest in:

a. residential property?

b. Build-to-Rent housing?

c. social housing?

Have you ever:

a. completed internal research that includes retirement outcomes for fund members who own their home in retirement, compared to those who do not?

b. commissioned external research that includes retirement outcomes for fund members who own their home in retirement, compared to those who do not?

For the last five financial years, please complete the table for investments across all your funds in all forms of residential property:

a. in nominal value

b. as a share of your total portfolio

c. the average return on investment.

For the last five financial years, please complete the table for investments across all your funds in Build-to-Rent property:

a. in nominal value

b. as a share of your total portfolio

c. the average return on investment.

For the last five financial years, please complete the table for investments across all your funds in social housing property:

a. in nominal value

b. as a share of your total portfolio

c. the average return on investment.

Please outline your policy on:

a. Fund members using their superannuation fund for a deposit to buy their first home.

b. Retirees using their superannuation to:

i. renovate their home

ii. pay rent.

Within your fund, what percentage of retirees in each of the last five financial years used their superannuation to:

a. renovate their home?

b. clear their remaining mortgage?

Insurance premiums

a. Have you ever deducted insurance premiums from fund members for insurance policies that they are not covered by?

b. Have you ever completed an audit to identify if insurance premiums have been deducted from fund members for insurance policies that they are not covered by?

Material distributed to members

a. Have you ever distributed materials to members that state and/or suggest that:

i. members have coverage under insurance policies that they do not have?

ii. members are required to keep a minimum balance in their superannuation fund?

iii. their employer may be unwilling to contribute to another superannuation fund?

iv. members require a statement of any kind from their employer to move away from your fund?

b. Have you ever completed an audit of materials distributed to members that state and/or suggest that members have coverage under insurance policies that they do not have?

c. Have you ever completed an audit to establish whether you have distributed materials to members that state and/or suggest that:

i. they are required to keep a minimum balance in their superannuation fund?

ii. their employer may be unwilling to contribute to another superannuation fund?

iii. they require a statement of any kind from their employer to move away from your fund?

Please provide as separated data, what the base salary and bonuses were, or are set to be, paid in the 2019/2020 and 2020/21 financial year for your:

a. Chief Executive Officer or equivalent?

b. Chief Investment Officer or equivalent?

Property investments

a. Do you have any current investments in the National Housing Finance and Investment Corporation? If so, what is the size of your investments?

b. Please provide information on the rental income for any residential property investments held for each year for the last five financial years.

Subscriptions to The New Daily

a. Has your fund ever considered subscribing your members to The New Daily through an opt-out model? If so:

i. Was this proposed initially internally, or externally?

ii. Who proposed it?

iii. Who approved it?

iv. What was the approval process?

v. What legal advice was sought?

vi. On what date did it proceed, or is it proposed to proceed?

b. Have the following groups ever enquired or requested your fund to subscribe your members to The New Daily:

i. Industry Super Holdings?

ii. The New Daily?

What arrangements, including donations, commissions, marketing expenditure or partnerships, do you have that lead to payments to research organisations or ‘think tanks’?

Please provide:

a. Names of the think tanks.

b. Payments made over the last five years.

Response

(Publication date)

Please provide the details of any fund member briefings where it was possible to ask fund managers, executives or directors questions over the past five years.

Responses to questions 1 - 62

(14 May 2020)(PDF974KB)

For the past five years the total value in dollars and as a percentage of the total value of a fund:

a. Listed investments.

b. Unlisted investments.

c. Total investments.

For the past five years the total value in dollars and as a percentage of the total return for the fund:

a. Listed investments.

b. Unlisted investments.

c. Total investments.

Details of each individual asset currently held at a value other than available listed market prices (an unlisted asset) wholly owned by the fund or funds under your control, including:

a. The asset name and location.

b. The frequency of the revaluation of the asset.

c. The most recent valuation.

d. A copy of that valuation.

e. The methodology used for its valuation.

f. Whether the valuation was completed internally or externally.

g. The details of any external party involved in the valuation.

Details of each individual asset currently held at a value other than available listed market prices (an unlisted asset) partly owned by the fund or funds under your control, including:

a. The asset name and location.

b. The frequency of the revaluation of the asset.

c. The most recent valuation.

d. A copy of that valuation.

e. The methodology used for its valuation.

f. Whether the valuation was completed internally or externally.

Details of costs for advertising campaigns for the past five years, including:

a. The companies invited to tender for all or parts of any advertising campaign.

b. The companies awarded campaigns.

c. The total cost of each campaign.

d. The cost of the campaign’s development.

e. Broadcasting (television, radio and internet) and publishing costs.

f. Assessment reports of the efficacy of campaigns in either retaining or gaining new members.

Over the last five financial years:

a. What is the total budget for all costs associated with the fund?

b. What were the total assets under management?

c. What are the total number of employees?

d. What are the total number of contractors?

e. What are the total number of externally hired contracts, and their value?

Over the last five financial years:

a. What is the total number of member accounts?

b. What is the total increase in the number of members as a result of the fund’s default status?

c. What is the total increase in the number of members through voluntary adoption or switching?

d. What was the average member balance?

e. What was the average dollar amount deducted in insurance fees per member, across all fund products in dollar terms and as a share of a member account?

f. What was the total number of inactive accounts? (Please use the APRA definition: no contributions for two years)

Over the last five financial years:

a. What was the average dollar amount deducted for administration and asset management fees per member, across all fund products? (please do not include insurance fees)

b. What was the cost (%) of fund administration expenses as a proportion of funds under management?

c. What was the total cost of in-house administration expenses?

d. What was the cost of in-house administration expenses as a proportion of funds under management?

e. What was the total cost of any external administration expenses?

f. What was the cost of any external administration expenses as a proportion of funds under management?

g. What was the total cost of any external administration expenses to Related Parties?

h. What was the cost of any external administration expenses to Related Parties as a proportion of funds under management?

i. How many staff are employed in roles considered part of the administrative cost?

Over the last five financial years:

a. The number of rollover requests that the fund did not pay out to another fund for each year?

b. The average dollar value of a rollover for each year?

c. The value of any clawback accounts and/or funds held that is used to hold funds between financial years?

a. Does the fund maintain a reserve at least partially funded through insurance premiums, rebates from an insurance company (such as profit share arrangements) or tax benefits that have arisen from insurance?

b. The total value of that reserve?

c. The total value of tax rebates received from the ATO on insurance premiums?

In the context of building investments:

a. Have you completed assessments of the prevalence of flammable cladding across some properties?

b. Have you completed assessments of the prevalence of flammable cladding across all properties?

c. Have you taken any remediation to reduce your exposure to risk to identify flammable cladding, and if so, what?

d. Have you taken any remediation to reduce your exposure to risk to remove flammable cladding, and if so, what?

e. Do you hold any properties where insurance has been refused or are uninsured due to defective building construction such as cladding?

Governance:

a. How many trustee board members did the fund have?

b. What was the total salary of all trustee board members?

c. What was the average salary of all trustee board members?

d. Are there any performance-based assessments that determine trustee board remuneration, and if so what are they?

e. What was the salary of the trustee board chair?

f. What was the average length of service of all trustee board members?

g. What is the length of service of the longest serving trustee board member?

h. Are trustee board members asked whether they have conflicts of interest at each meeting, and if not, why not?

i. What is the conflict of interest policy for trustee board members?

j. Does your fund have a policy on gender diversity and/or balance for listed companies?

k. Does your board have gender balance?

In the context of the ACCC’s legal action and question for competition in monopoly infrastructure entities:

a. What are the implications for infrastructure investment returns if the ACCC is successful in its legal action?

b. Have you analysed your infrastructure investment portfolio to examine the risk of ACCC action to reduce anti-competitive monopoly of oligopoly pricing?

c. If so, can you provide details of the likely impact, and what is the project impact on revenue and income?

In dollar terms, for each of your superannuation products, can you please provide annual data for the past five financial years on average, for a member with a balance of $6,000, $50,000 and $150,000?

a. Investment fees

b. Administration fees

c. Indirect costs

d. Any other cost to a member which is incurred or foregone by way of a lesser return pre-unit price (but not included in the indirect cost ratio) including any other costs, charges, fees, direct or indirect benefits including any benefit by way of rebate, set-off, commission, in-kind, tax credit/offset retained, interest (or interest rebate) retained by any party involved in the management, custody, review, compliance, administration, servicing, asset consulting, valuation, operation and maintenance, financing, auditing, brokerage, execution, settlement, or otherwise of the assets in the fund, or their underlying assets.

e. An aggregate total of all fees mentioned above.

As a percentage of the value of the member account, for each of your superannuation products, can you please provide annual data for the past five financial years on average, for a member with a balance of $6,000, $50,000 and $150,000?

a. Investment fees

b. Administration fees

c. Indirect costs

d. Any other cost to a member which is incurred or foregone by way of a lesser return pre-unit price (but not included in the indirect cost ratio) including any other costs, charges, fees, direct or indirect benefits including any benefit by way of rebate, set-off, commission, in-kind, tax credit/offset retained, interest (or interest rebate) retained by any party involved in the management, custody, review, compliance, administration, servicing, asset consulting, valuation, operation and maintenance, financing, auditing, brokerage, execution, settlement, or otherwise of the assets in the fund, or their underlying assets.

e. An aggregate total of all fees mentioned above.

For the past five years:

a. What was the total cost of all advertising and/or marketing?

b. What was the total cost of all advertising and/or marketing per member?

c. What was the total cost of all advertising per new (FY19) member?

d. What was the total cost of all television advertising and/or marketing?

e. What was the total cost of all radio advertising and/or marketing?

f. What was the total cost of all print advertising and/or marketing?

g. What was the total cost of all online advertising and/or marketing?

h. How many in-house staff are employed in advertising and marketing roles?

i. How much was spent on engaging external advertising and marketing consultants?

j. Do you advertise and/or directly financial contribute to the New Daily?

Can you provide details if you have purchased the following over the past decade:

a. Google advertisements

b. Google search terms.

How will the overall fund performance be affected if:

a. The income return of unlisted assets declines?

b. The fund can no longer purchase unlisted assets onshore?

c. The fund can no longer purchase unlisted assets offshore?

Valuation methodologies:

a. Have you compared your valuation methodologies and assumptions for unlisted assets with other superannuation funds, and if so, what are the differences?

b. Are you confident that your valuation methodologies and assumptions for unlisted assets reflect their value to the fund, and how often are they reviewed?

c. How do you compare your valuations to listed investments, including, but not limited to, whether there is a cross check to stock prices for similar assets?

d. Have you ever calculated whether there would be a difference between valuations if unlisted assets were listed?

a. How many unlisted assets do you hold in the fund?

b. What value share are unlisted assets of the fund’s:

i. total value?
ii. total property value?

Discount rates:

a. For unlisted assets, do you use a consistent discount rate for income across all unlisted assets, or an asset-specific discount rate?

b. What is the discount rate you apply to the income from unlisted assets, and has it changed over the past decade, and if so, when and why?

Over the past decade:

a. Have you ever devalued an unlisted asset?

b. Have you ever devalued an unlisted asset by more than $10 million?

c. Have you ever devalued an unlisted asset by more than $50 million?

d. Have you ever devalued an unlisted asset by more than $100 million?

e. Please advise the companies and/or individual valuers that have valued your unlisted assets

For each year of the past decade:

a. How many fund members do you have?

b. How many financial planners do you have in total numbers, and as a member to financial planner ratio?

c. How many financial advisers do you have in total numbers, and as a member to financial planner ratio?

For each year of the past decade:

a. How much is charged for financial planning annually to fund members, and what is the average per fund member?

b. How much is charged for financial planning annually to funds, and what is the average per fund member?

c. How much is charged for financial advice annually to fund members, and what is the average per fund member?

d. How much is charged for financial advice annually to funds, and what is the average per fund member?

For each year of the past decade:

a. What is the cost of general advice annually, and what is the average per fund member?

b. What are the aggregate value of bonuses provided for general advice, and what is the average per adviser?

For each year of the past decade:

a. What is the cost of scaled advice annually, and what is the average per fund member?

b. What are the aggregate value of bonuses provided for scaled advice, and what is the average per adviser?

For each year of the past decade:

a. What is the cost of comprehensive advice annually, and what is the average per fund member?

b. What are the aggregate value of bonuses provided for comprehensive advice, and what is the average per adviser?

For each year of the past decade:

a. What is the cost of intra-fund advice annually, and what is the average per fund member?

b. What are the aggregate value of bonuses provided for intra-fund advice, and what is the average per adviser?

Over the past five years:

a. How many employees have been cautioned for misconduct?

b. How many employees have had a penalty (such as, but not limited to, loss of bonus) for misconduct?

c. How many employees have been terminated for misconduct?

d. How many employees have been cautioned for misconduct, as a share of all employees over that timeframe?

e. How many employees have had a penalty (such as, but not limited to, loss of bonus) for misconduct, as a share of all employees over that timeframe?

f. How many employees have been terminated for misconduct, as a share of all employees over that timeframe?

Responses to questions 63 - 76

(27 May 2020)
(PDF974KB)

Listed companies holding infrastructure assets have had write downs of around 40 per cent:

a. How does this compare to your write down of unlisted assets?

b. If there is a difference, why is there a difference?

Have you had any liquidity issues in honouring your obligations to members as a result of the:

a. recent decline in the share market?

b. permission by the Federal government to allow members to remove up to $10,000 per financial year if they lose their job?

Liquidity management:

a. What is your fund’s process for complying with APRA’s prudential framework which requires trustees to have a liquidity management plan?

b. How is the plan being reported to the trustee directors?

c. Who is responsible for the day-to-day liquidity management for the fund?

Since 12 March 2020, has your fund provided any liquidity to:

a. REST?

b. Hostplus?

c. any other superannuation fund?

If so, for each fund, can you provide details of the amount, the date and the terms?

Responses to questions 77 - 90

(14 August 2020)
(PDF376KB)

Since 12 March 2020, has your fund loaned any cash to:

a. REST?

b. Hostplus?

c. any other superannuation fund?

If so, for each fund, can you provide details of the amount, the date and the terms?

Regarding any investments you have with IFM Investors, please provide the following:

a. The capital invested each year for the past five years.

b. The accumulated valuation of investments for the past five years.

c. The dividends received from those investments for the past five years.

Regarding any investments you have with ME Bank, please provide the following:

a. The capital invested each year for the past five years.

b. The accumulated valuation of investments for the past five years.

c. The dividends received from those investments for the past five years.

If you are an investor in ME Bank, have you individually (or in collaboration with other funds), ever commissioned reports into its valuation in the past decade?

a. And if so, how many reports and in what year?

b. Were any commissioned to be completed by the UK-based group, LEK?

c. And please provide copies.

According to reports in the Australian Financial Review superannuation fund, Hostplus, redefined the definition of ‘illiquid assets’ (‘Hostplus warned of liquidity “perfect storm”’, Australian Financial Review, 18 May 2020). Therefore, can you please advise:

a. How you define ‘illiquid assets’ within your fund, including details of holdings and timeframes?

b. How you define ‘liquid assets’ within your fund, including details of holdings and timeframes?

c. How long each of these definitions have been used?

d. What prompted any switch to these definitions?

e. What the prior definitions were before any switch?

Have you completed a skills audit in the past five years of the following:

a. Your board of directors?

b. Your investment committee?

c. And if not, why not?

d. And if so, presently what gaps are identified?

Prior to appointment, have employees fulfilling fiduciary roles had their investment performance track record assessed before fees?

a. And if not, why not?

b. And if not prior to appointment, have they following appointment?

c. And if so, on what timeframe?

Do you currently have an art collection?

a. If so, can you advise its current valuation?

b. If so, can you advise where it is stored and/or exhibited?

Do you engage proxy advisers?

a. What are the terms of engagement for proxy advisers?

b. To what extent are they empowered to act on behalf of the entity?

c. Does their advice get provided to the board?

d. How often is advice submitted to the board?

e. Is their advice formally adopted by the board?

f. Are their positions publicly stated?

g. How does the board assess these positions concurrent with their duties as trustees and the sole purpose test?

Are you currently, or have you previously been, a member or subscriber of the ACTU Members Connect Program?

a. If so, what is the timeframe of your membership?

b. What has been the annual fee year-on-year?

c. How have you assessed its value to your members?

Please provide the titles of all externally commissioned reports over the past five years that have reviewed any of the following:

a. Performance of funds.

b. Investment strategies for funds.

c. Conflicts of interest for funds.

Responses to questions 91 - 95

(14 August 2020)
(PDF227KB)

For each fund where more than 30 per cent of capital is managed by another entity, please complete the below table including:

a. The name of the fund.

b. The allocation of capital as a percentage of the total capital held by the fund.

c. The allocation of capital of the total capital held by the fund.

d. The entity managing the capital.

e. Whether you are a shareholder in that entity.

Please provide details of the following reduction to remuneration packages since 11 March 2020:

a. Board members.

b. The chief executive.

c. Executive management.

Since 1 January 2020, for each fund, please outline:

a. The date and value at the highest valuation of the fund?

b. The date and value at the lowest valuation of the fund?

c. The number of business days between the highest and lowest valuation for the fund?

d. The nominal value between the highest and lowest valuation for the fund?

e. The percentage value between the highest and lowest valuation for the fund?

f. The number of business days between the date of the ASX’s lowest valuation, and the lowest day for the valuation of the fund?

g. The number of business days between the date of the ASX’s lowest valuation, and the lowest valuation of unlisted assets in the fund?

h. What volume of switching of investments occurred between funds between the highest and lowest valuations?

i. What volume of switching between funds occurred in that time by trustees of the fund that are also members of the fund, between the highest and lowest valuations?

j. What volume of switching between funds occurred in that time by executives of the fund that are also members of the fund, between the highest and lowest valuations?

k. What volume of switching between funds occurred in that time by other employees of the fund that are also members of the fund, between the highest and lowest valuations?

l. What integrity measures were taken to prohibit trustees, executives and employees switching between funds from taking advantage of arbitrage of any gap between the lowest valuation date of the ASX and any revaluation of the fund?

Responses to questions 96 - 100

(26 August 2020)
(PDF296KB)

On financial advisers providing non-intrafund advice (i.e. comprehensive advice - beyond the scope of intrafund advice) within the fund over the past five financial years:

a. How many do you employ (or are you paying for through outsourced arrangements)?

b. What is the revenue generated from these non-intrafund advisers?

c. How many financial advisers within the fund also provide intrafund advice?

d. If you have non-intrafund financial advisers within the fund also providing intrafund advice, how is their remuneration determined from different sources?

e. Is there any cross-subsidisation for non-intrafund financial advisers within the fund from activities funded through intrafund advice?

f. Is there any cross-subsidisation for financial advisers from intrafund advice to non-intrafund financial advisers within the fund?

g. What is the total budgeted cost and actuals for financial advisers?

h. What is the remuneration level/range for the financial advisers employed to provide non-intrafund advice to your members?

i. What is the aggregated cost of their remuneration?

ii. What is the aggregated cost for their employment?

iii. What is the aggregated cost for their on-costs, including but not limited to, superannuation, leave, training support and office space?

iv. What is the aggregated cost for marketing their services?

v. What is the aggregated cost for administrative support services?

vi. What is the aggregated cost for professional insurance and indemnity?

vii. What is the aggregated cost for compliance oversight?

viii. What is the aggregated cost for legal oversight?

ix. What is the aggregated cost for other regulatory oversight?

x. What is the aggregated cost for the unit, including overheads, that provides financial advice within the fund?

On financial advisers providing intrafund advice (i.e. strictly limited to advice on your super fund for the member only - not spouse) within your fund over the last five financial years:

a. How many do you employ (or are you paying for through outsourced arrangements)?

b. What is the remuneration level/range for the financial advisers employed to provide intrafund advice to your members?

i. What is the aggregated cost of their remuneration?

ii. What is the aggregated cost for their employment?

iii. What is the aggregated cost for their on-costs, including but not limited to, superannuation, leave, training support and office space?

iv. What is the aggregated cost for marketing their services?

v. What is the aggregated cost for administrative support services?

vi. What is the aggregated cost for professional insurance and indemnity?

vii. What is the aggregated cost for compliance oversight?

viii. What is the aggregated cost for legal oversight?
           
ix. What is the aggregated cost for other regulatory oversight?

x. What is the aggregated cost for the unit, including overheads, that provides intrafund advice?

c. What is the revenue that intrafund advisers have generated?

d. How many financial advisers providing intrafund advice also provide it within the fund?

e. If you have financial advisers providing intrafund advice also providing it within the fund, how is their remuneration determined from different sources?

f. Is there any cross-subsidisation for financial advisers providing intrafund advice from revenue funded through activities within the fund?

g. What is the total budgeted cost and actuals for the intrafund advice unit?

h. What is the revenue generated from these financial advisers?

i. Within your fund, is there any cross-subsidisation for intrafund advice services?

Do you allow members to use their funds to pay for:

a. Financial advice?

b. Internal financial advisers?

c. External financial advisers?

Please advise the total remuneration package of your:

a. company secretary, and

b. Chief Executive Officer, including:

i. total remuneration

ii. base salary

iii. annual bonuses

iv. deferred bonuses

v. equity or other options

vi. additional compensation not covered in the above.

Responses to
questions 101 - 119

(25 November 2020)
(PDF1,044KB)

For each year of the past decade, please advise the:

a. annual remuneration of the average worker who contributes to your fund

b. average annual superannuation contribution from an employee to your fund

c. multiple your CEO is remunerated compared to the annual remuneration of the average worker who contributes to your fund.

In the context of marketing and advertising campaigns:

a. How many is your fund currently running individually, or in collaboration with others?

b. How many have run, or are currently running since the beginning of calendar year 2020?

c. What is the actual cost for each campaign (including development, production, broadcasting, and distribution) to 30 June 2020?

d. What is the actual cost for each campaign (including development, production, broadcasting, and distribution) budgeted?

e. What is the budgeted cost for each campaign (including development, production, broadcasting, and distribution) from 1 July 2020 – 31 December 2020?

f. What is the budgeted cost for any existing or proposed campaigns (including development, production, broadcasting, and distribution) for the period 1 January 2021 – 30 June 2021?

g. What is the budgeted cost for any existing or proposed campaigns (including development, production, broadcasting, and distribution) for the period 1 July 2021 – 31 December 2021?

For each of the following categories, please provide the percentages of employees that are women, men, or who identify otherwise:

a. all employees

b. non-executive employees

c. executive employees

d. senior executive employees.

Do you have a target for the employment of:

a. women as a share of:

i. all employees?

ii. executive employees?

iii. senior executive employees?

b. people who are gender non-binary as a share of:

i. all employees?

ii. executive employees?

iii. senior executive employees?

Since the introduction of Superstream, which has standardised the transfer of funds, has there been:

a. A reduction in the cost to the fund for transferring funds, and if so, by how much?

b. A reduction in the fees charged to members reflecting any saving, and if so, by how much?

Greenhouse gas emissions

a. Does your fund have an internal target for your own greenhouse gas emissions footprint by:

i. 2030?

ii. 2035?

iii. 2040?

iv. 2045?

v. 2050?

b. Does your fund have a target for reducing greenhouse gas emissions from investments by:

i. 2030?

ii. 2035?

iii. 2040?

iv. 2045?

v. 2050?

c. Does your fund intend to divest from investments if they do not reach their greenhouse gas emissions reduction targets by:

i. 2030?

ii. 2035?

iii. 2040?

iv. 2045?

v. 2050?

The New Daily

a. Have you ever completed a cost benefit analysis of The New Daily to your fund?

i. If so, when did you complete this cost benefit analysis?

ii. Please provide a copy of the cost benefit analysis.

b. Have you ever completed a cost benefit analysis of The New Daily to your members?

i. If so, when did you complete your cost benefit analysis of the New Daily to your members?

ii. Please provide a copy of the cost benefit analysis.

Financial advisers remuneration

a. Are your financial advisers paid:

i. a base salary?

ii. non-salaried remuneration, including bonuses?

b. Are your financial advisers, who are only remunerated with a base salary, eligible to provide:

i. personal advice?

ii. general advice?

Have any technology innovations within the fund reduced the cost of operating the fund over the past decade?

If so, please outline:

a. the technological innovations

b. the cost saving

c. the cost saving passed through to fees charged to members.

Valuations

a. What data is provided to valuation teams to assess the value of unlisted assets?

b. When the fund provides data to valuation teams to assess the value of unlisted assets, does this include internal modelling of asset valuations?

c. What assumptions are provided to valuation teams when assessing the value of unlisted assets?

d. When valuation teams assess the value of unlisted assets, do they solely take account of past performance?

e. When valuation teams assess the value of unlisted assets, what weighting do they take on the projected value of the market for such unlisted assets to inform their valuations?

f. For the past decade can you please complete the below table for each unlisted asset valued under your valuation policy.

Over the past decade, how many non-disclosure agreements have you agreed to in relation to:

a. human resources issues?

b. sexual harassment issues?

Do you use an internal clearing house to receive the superannuation payments from employers, or their payroll representatives, before they are allocated to an individual member’s account and/or fund?

If so:

a. What is the name of the clearing house?

b. Why do you use a clearing house?

c. How much does it cost annually to use the clearing house?

d. How much does it cost annually to each member to use the clearing house?

e. What happens to interest accrued from funds held in the clearing house?

f. What happens to non-interest income and/or capital gains accrued from funds held in the clearing house?

Do you use an external clearing house to receive the superannuation payments from employers, or their payroll representatives, before they are allocated to an individual member’s account and/or fund?

If so:

a. What is the name of the clearing house?

b. Who owns the clearing house?

c. Why do you use an external clearing house?

d. How much does it cost annually to use the external clearing house?

e. How much does it cost annually to each member to use the external clearing house?

f. What happens to non-interest income and/or capital gains accrued from funds held in the external clearing house?

If you use an internal clearing house please outline when money is received into the clearing house:

a. On average, how long does it stay in the clearing house before it:

i. is allocated to a member’s account and/or fund?

ii. is allocated to purchase units for a member’s account and/or fund?

iii. appears in a member’s account and/or fund statement and/or online record?

b. What is the longest time that it has stayed in the clearing house before it:

i. is allocated to a member’s account and/or fund?

ii. is allocated to purchase units for a member’s account and/or fund?

iii. appears in a member’s account and/or fund statement and/or online record?

c. What is the shortest time that it has stayed in the clearing house before it:

i. is allocated to a member’s account and/or fund?

ii. is allocated to purchase units for a member’s account and/or fund?

iii. appears in a member’s account and/or fund statement and/or online record?

d. For interest accrued from holding funds in the clearing house for the member, is it then subsequently allocated to:

i. the individual member’s account and/or fund?

ii. a different account and/or fund? If so, what is its name?

e. For non-interest income and/or capital gains accrued from holding funds in the clearing house for the member, is it then subsequently allocated to:

i. the individual member’s account and/or fund?

ii. a different account and/or fund? If so, what is its name?

If you use an external clearing house please outline when money is received into the clearing house:

a. On average, how long does it stay in the clearing house before it:

i. is allocated to a member’s account and/or fund?

ii. is allocated to purchase units for a member’s account and/or fund?

iii. appears in a member’s account and/or fund statement and/or online record?

b. What is the longest time that it has stayed in the clearing house before it:

i. is allocated to a member’s account and/or fund?

ii. is allocated to purchase units for a member’s account and/or fund?

iii. appears in a member’s account and/or fund statement and/or online record?

c. What is the shortest time that it has stayed in the clearing house before it:

i. is allocated to a member’s account and/or fund?

ii. is allocated to purchase units for a member’s account and/or fund?

iii. appears in a member’s account and/or fund statement and/or online record?

d. For interest accrued from holding funds in the clearing house for the member, is it then subsequently allocated to:

i. the individual member’s account and/or fund?

ii. a different account and/or fund? If so, what is its name?

e. For non-interest income and/or capital gains accrued from holding funds in the clearing house for the member, is it then subsequently allocated to:

i. the individual member’s account and/or fund?

ii. a different account and/or fund? If so, what is its name?

In reference to the original publication of the article ‘CEOs push to reopen faster’ in the Australian Financial Review on 20 October 2020 which states:

Meanwhile, restaurateur Chris Lucas, pub owner and former AFL player Paul Dimattina and CSL chairman Brian McNamee all spoke of repercussions from elements of the labour movement for criticising the state government over the failures which led to the crisis and the subsequent slow pace of reopening the economy. Union-aligned industry superannuation fund managers have pressured Dr McNamee to stop his outspoken criticisms of the state government lockdown, even though he has repeatedly said he is speaking in a personal capacity and not for the company.

In the context of confronting, bullying or intimidatory workplace cultures, please advise:

a. has the Chair of your fund been in contact through any medium with Dr McNamee or his office since 5 August 2020, and if so please advise the name of the person who made contact and the nature of any communications.

b. have board members of your fund been in contact through any medium with Dr McNamee or his office since 5 August 2020, and if so please advise the name(s) of the person(s) who made contact and the nature of any communications.

c. has the CEO of your fund been in contact through any medium with Dr McNamee or his office since 5 August 2020, and if so please advise the name of the person who made contact and the nature of any communications.

d. have senior executives of your fund been in contact through any medium with Dr McNamee or his office since 5 August, and if so please advise the name(s) of the person(s) who made contact and the nature of any communications.          

In dollar terms, how much advertising space did your fund book (directly or indirectly through a broker or agent) in the second half of 2020 that was unused on:

a. radio?

b. television?

c. print?

Responses to questions 121 - 134

(30 March 2021
(PDF323KB)

In dollar terms, how much advertising space did your fund book (directly or indirectly through a broker or agent) in the second half of 2020 that was unused on:

a. radio?

b. television?

c. print?

What is your current policy on whether your funds are permitted to invest in:

a. residential property?

b. Build-to-Rent housing?

c. social housing?

Have you ever:

a. completed internal research that includes retirement outcomes for fund members who own their home in retirement, compared to those who do not?

b. commissioned external research that includes retirement outcomes for fund members who own their home in retirement, compared to those who do not?

For the last five financial years, please complete the table for investments across all your funds in all forms of residential property:

a. in nominal value

b. as a share of your total portfolio

c. the average return on investment.

For the last five financial years, please complete the table for investments across all your funds in Build-to-Rent property:

a. in nominal value

b. as a share of your total portfolio

c. the average return on investment.

For the last five financial years, please complete the table for investments across all your funds in social housing property:

a. in nominal value

b. as a share of your total portfolio

c. the average return on investment.

Please outline your policy on:

a. Fund members using their superannuation fund for a deposit to buy their first home.

b. Retirees using their superannuation to:

i. renovate their home

ii. pay rent.

Within your fund, what percentage of retirees in each of the last five financial years used their superannuation to:

a. renovate their home?

b. clear their remaining mortgage?

Insurance premiums

a. Have you ever deducted insurance premiums from fund members for insurance policies that they are not covered by?

b. Have you ever completed an audit to identify if insurance premiums have been deducted from fund members for insurance policies that they are not covered by?

Material distributed to members

a. Have you ever distributed materials to members that state and/or suggest that:

i. members have coverage under insurance policies that they do not have?

ii. members are required to keep a minimum balance in their superannuation fund?

iii. their employer may be unwilling to contribute to another superannuation fund?

iv. members require a statement of any kind from their employer to move away from your fund?

b. Have you ever completed an audit of materials distributed to members that state and/or suggest that members have coverage under insurance policies that they do not have?

c. Have you ever completed an audit to establish whether you have distributed materials to members that state and/or suggest that:

i. they are required to keep a minimum balance in their superannuation fund?

ii. their employer may be unwilling to contribute to another superannuation fund?

iii. they require a statement of any kind from their employer to move away from your fund?

Response

(Publication date)

Please provide the details of the governance structure of ME Bank, including:

a. The Executive management and their committees.

b. The Board and their committees.

c. The frequency of Board meetings.

Responses to questions 1 - 11

(14 May 2020)
(PDF534KB)

Please provide details of:

a. the shareholdings of ME Bank, including shareholders and percentage shareholdings on 1 January 2020.

b. any change to industry funds shareholdings of ME Bank, including shareholders and percentage shareholdings since 1 January 2020.

Please provide details of any capital provided by ME Bank to CBUS since 12 March 2020 through:

a. loans.

b. debt facilities.

c. the temporary or permanent reallocation of shares.

d. the temporary or permanent sale of shares.

Please provide details of any capital provided by ME Bank to REST since 12 March 2020 through:

a. loans.

b. debt facilities.

c. the temporary or permanent reallocation of shares.

d. the temporary or permanent sale of shares.

Please provide details of any capital provided by ME Bank to Hostplus since 12 March 2020 through:

a. loans.

b. debt facilities.

c. the temporary or permanent reallocation of shares.

d. the temporary or permanent sale of shares.

In the context of the decision by ME Bank to confiscate customers savings from accounts to pay down the principal of a mortgage, please provide the following details:

a. The legal terms and conditions that ME Bank can make such a decision.

b. The date that it was proposed to the Executive.

c. The date that the decision was made by the Executive.

d. The committee that proposed the decision to the Board.

e. A copy of their submission proposing it to the Board.

f. The date that it was proposed to the Board.

g. The date that the decision was approved by the Board.

h. The date that the decision was communicated to staff within ME Bank.

i. A copy of their notification to staff within ME Bank.

j. The decision making process made by ME Bank to justify such a decision at a bank level.

k. The decision making process made by ME Bank to justify such a decision at an individual mortgage level.

l. Whether any assessment was made across ME Bank of the volume of savings that would be confiscated, customers affected and the reduction in the debt held by ME Bank.

m. The decision making process of calculating the dollar value for each customer.

n. The assessment made of the financial capacity of the customer prior to the confiscation of their savings.

o. The assessment of the employment status and income of the customer prior to the confiscation of their savings.

p. A copy of the notification provided to mortgage holders of the confiscation of their savings.

q. The timeframe for notification provided to mortgage holders of the confiscation of their savings.

r. The flexibility for redraw confiscated savings to affected mortgage holders.

In the context of the decision by ME Bank to confiscate customers savings from offset accounts to pay down the principal of a mortgage, please provide the following details:

a. The legal terms and conditions that ME Bank can make such a decision.

b. The date that it was proposed to the Executive.

c. The date that the decision was made by the Executive.

d. The committee that proposed the decision to the Board.

e. A copy of their submission proposing it to the Board.

f. The date that it was proposed to the Board.

g. The date that the decision was approved by the Board.

h. The date that the decision was communicated to staff within ME Bank.

i. A copy of their notification to staff within ME Bank.

j. The decision making process made by ME Bank to justify such a decision at a bank level.

k. The decision making process made by ME Bank to justify such a decision at an individual mortgage level.

l. Whether any assessment was made across ME Bank of the volume of savings that would be confiscated, customers affected and the reduction in the debt held by ME Bank.

m. The decision making process of calculating the dollar value for each customer.

n. The assessment made of the financial capacity of the customer prior to the confiscation of their savings.

o. The assessment of the employment status and income of the customer prior to the confiscation of their savings.

p. A copy of the notification provided to mortgage holders of the confiscation of their savings.

q. The timeframe for notification provided to mortgage holders of the confiscation of their savings.

r. The flexibility for redraw confiscated savings to affected mortgage holders.

Since 1 January 2020, how many mortgage holders have had savings from their accounts taken and paid against the principal of their mortgage products?

a. Individuals and mortgage products?

b. In dollar value?

Responses to questions 12 - 24

(1 April 2020)
(PDF567KB)

In the contracting of Mr Tony Beck:

a. What are the terms of his contract?

b. What are the services he is hired to provide?

c. What is the financial value of his current contract?

d. What is the length of the terms of his current contract?

e. What is the date of commencement of his current contract?

f. For how many years has he been contracted prior to his current contract?

Please provide in a table for each year since ME Bank’s formation:

a. ME Bank’s valuation.

b. Dividends paid to shareholders.

c. Capital provided from shareholders.

In the context of the decision by ME Bank to reduce the redraw facilities of customers, please provide the following details:

a. The legal terms and conditions that ME Bank can make such a decision.

b. The date it was proposed to the Executive.

c. The date that the decision was made by the Executive.

d. The committee that proposed the decision to the Board.

e. The date of the formation of the committee that proposed the decision to the Board.

f. The paper provided by management to the committee.

g. The paper provided by the committee to the Board.

h. The date that it was proposed to the Board.

i. The date that the decision was approved by the Board.

j. The date that the decision was communicated to staff within ME Bank.

k. A copy of their notification to staff within ME Bank.

l. The decision making process made by ME Bank to justify such a decision at a bank level.

m. The decision making process made by ME Bank to justify such a decision at an individual redraw facility level.

n. Whether any assessment was made across ME Bank of the value of redraw facilities that would be reduced.

o. The average dollar value for each customer.

p. The assessment made of the financial capacity of the customers impacted prior to the reduction in redraw facilities.

q. The assessment of the employment status and income of the customer prior to the reduction of their redraw facilities.

r. A copy of the notification provided to customers who had their redraw facilities reduced.

s. The date of the notification’s distribution.

t. The date and time of the decision made to allow customers to be able to reverse ME Bank’s decision.

u. The date and time of ME Bank’s receipt of notification that it would be required to appear before the House of Representatives Standing Committee on Economics.

v. The number of customers who have nominated to reverse the decision of ME Bank.

w. The value of the options exercised by customers who have nominated to reverse the decision of ME Bank.

x. The date ME Bank informed ASIC of its intent to reduce the redraw facility of its customers.

y. A copy of the notification to ASIC of ME Bank’s intent to reduce the redraw facility of its customers.

z. The date ME Bank informed ASIC of its decision to reduce the redraw facility of its customers.

aa. A copy of the notification to ASIC of ME Bank’s decision to reduce the redraw facility of its customers.

bb. The date ME Bank informed APRA of its intent to reduce the redraw facility of its customers.

cc. A copy of the notification to APRA of ME Bank’s intent to reduce the redraw facility of its customers.

dd. The date ME Bank informed APRA of its decision to reduce the redraw facility of its customers.

ee. A copy of the notification to APRA of ME Bank’s decision to reduce the redraw facility of its customers.

Hansard p. 21

14 May 2020

Hansard p. 25

14 May 2020

Hansard p. 31

14 May 2020

Hansard p. 21

14 May 2020

Hansard p. 29

14 May 2020

Please provide details of the process you apply for assessing voting at annual general meetings of listed companies, including:

a. The committee appointed to make decisions.

b. The committee membership.

c. Whether that committee reports to the Board.

d. What principles guide decision making.

e. Whether there is a report to the board about decisions made.

f. Whether decisions are made based on the objectives of improving capital value, or social or environmental priorities.

Responses to questions 27 - 33

(16 June 2020)
(PDF630KB)

In the context of your board:

a. What is the process for board appointments?

b. Is there a skills matrix completed before board appointments?

c. Are any of your shareholders entitled to appoint directors?

d. How, if at all, are shareholders represented to the board?

e. How, if at all, are shareholders represented within the company?

ME31QW

Do you currently have an art collection?

a. If so, can you advise its current valuation?

b. If so, can you advise where it is stored and/or exhibited?

Do you engage proxy advisers?

a. What are the terms of engagement for proxy advisers?

b. To what extent are they empowered to act on behalf of the entity?

c. Does their advice get provided to the Board?

d. How often is advice submitted to the Board?

e. Is their advice formally adopted by the Board?

f. Are their positions publicly stated?

g. How does the Board assess these positions concurrent with their duties as trustees and the sole purpose test?

Are you currently, or have you previously been, a member or subscriber of the ACTU Members Connect Program?

a. If so, what is the timeframe of your membership?

b. What has been the annual fee year-on-year?

c. How have you assessed its value to your members?

Responses to questions 34 - 42

(1 April 2021)
(PDF577KB)

In an article from 14 November 2014, ‘Review sparks questions about ME Bank sale’, Australian Financial Review:

a. Mr McPhee is quoted as saying ‘no one has given me that indication at all’ regarding the potential sale of ME Bank. Can he clarify whether that statement remains true today?
b. Reference is made to HESTA’s holding of ME Bank at $151 million (reflecting 15.9 per cent of ME Bank), which could be crudely calculated as putting the valuation of ME Bank at $950 million.

i. Does ME Bank agree with that valuation at that time, and if not, what was the valuation at that time?
ii. What is the valuation today?

c. Reference is made to ME Bank having 312,000 customers at around 4 per cent of industry super fund members. What are those numbers for 30 June 2019?

In the context of ME25QW that provides a share register for ME Bank, Jennifer Tomlins and Stanley Tomlins both owned and disposed of a single share in 1996:

a. Who are these individuals?

b. Did they work for ME Bank?

c. Why did they own shares?

d. What was the value of their shares at point they were allocated?

e. Did they surrender the shares?

f. Did they sell the shares, and if so, to whom?

g. At the point of disposal was there a difference in their value from when they were allocated, and if so, what was the difference in their value?

Responses to questions 43 - 48

(19 August 2020)
(PDF151KB)

In the context of ME25QW, it appears that between 1996 and 1999 only National Mutual Funds Management held shares in ME Bank after the disposal of shares by Jennifer Tomlins and Stanley Tomlins:

a. Is this correct?

b. If not, who else was a shareholder during this period?

In the context of ME25QW, it appears that Industry Fund Services purchased 1,000,002 shares from 2000 and built it up to 4,243,977 shares before disposing of them in 2007:

a. Who did IFS purchase shares from in 2000, or were new shares issued?

b. Were subsequent increases in IFS’s shareholdings as a result of new capital injections into ME Bank?          
      

In the context of ME25QW, in 2001 the National Mutual and IFS shareholdings both increased to 1,500,002. The 1,500,002 shares held by National Mutual were sold in 2003. It has been indicated that National Mutual was bought out from retained earnings. However this is not disclosed in the information provided:

a. Who did National Mutual sell its shares to? (There is not a commensurate change in other holdings disclosed.)         
     

In the context of ME25QW, in 2008 Industry Super Holdings (ISH) took a position in ME Bank of 388,480 shares. This built up to 2,351,985 shares by 2012 and was in addition to the IFBT stake, resulting in the IFBT stake being diluted:

a. Were the shareholdings of IFBT and ISH identical?

b. If not, how were the shareholders of IFBT compensated for the dilution in their shareholding?

In 2007 ME Bank was acquired by a non-operating holding company, IFBT Company Pty Limited, who bought all 4,243,977 shares from IFSIFBT, IFS and ME Bank were related parties.

a. Why was the ownership transferred from IFS to ME Bank?

b. IFBT was reported as also taking over IFS (‘Record profit for Members’, The Herald Sun, 6 February 2007. The IFBT board included Bernie Fraser, who was also a director of Australian Super and Cbus, both of which were likely shareholders of both IFBT and IFS. Mr Fraser was also a director of ME Bank between 2000 and 2015. How did Mr Fraser manage these conflicts of interest?

Response

(Publication date)

Please provide the details of any fund member briefings where it was possible to ask fund managers, executives or directors questions over the past five years.

Responses to questions 1 - 62

(30 April 2020)(PDF2,448KB)

For the past five years the total value in dollars and as a percentage of the total value of a fund:

a. Listed investments.

b. Unlisted investments.

c. Total investments.

For the past five years the total value in dollars and as a percentage of the total return for the fund:

a. Listed investments.

b. Unlisted investments.

c. Total investments.

Details of each individual asset currently held at a value other than available listed market prices (an unlisted asset) wholly owned by the fund or funds under your control, including:

a. The asset name and location.

b. The frequency of the revaluation of the asset.

c. The most recent valuation.

d. A copy of that valuation.

e. The methodology used for its valuation.

f. Whether the valuation was completed internally or externally.

g. The details of any external party involved in the valuation.

Details of each individual asset currently held at a value other than available listed market prices (an unlisted asset) partly owned by the fund or funds under your control, including:

a. The asset name and location.

b. The frequency of the revaluation of the asset.

c. The most recent valuation.

d. A copy of that valuation.

e. The methodology used for its valuation.

f. Whether the valuation was completed internally or externally.

Details of costs for advertising campaigns for the past five years, including:

a. The companies invited to tender for all or parts of any advertising campaign.

b. The companies awarded campaigns.

c. The total cost of each campaign.

d. The cost of the campaign’s development.

e. Broadcasting (television, radio and internet) and publishing costs.

f. Assessment reports of the efficacy of campaigns in either retaining or gaining new members.

Over the last five financial years:

a. What is the total budget for all costs associated with the fund?

b. What were the total assets under management?

c. What are the total number of employees?

d. What are the total number of contractors?

e. What are the total number of externally hired contracts, and their value?

Over the last five financial years:

a. What is the total number of member accounts?

b. What is the total increase in the number of members as a result of the fund’s default status?

c. What is the total increase in the number of members through voluntary adoption or switching?

d. What was the average member balance?

e. What was the average dollar amount deducted in insurance fees per member, across all fund products in dollar terms and as a share of a member account?

f. What was the total number of inactive accounts? (Please use the APRA definition: no contributions for two years)

Over the last five financial years:

a. What was the average dollar amount deducted for administration and asset management fees per member, across all fund products? (please do not include insurance fees)

b. What was the cost (%) of fund administration expenses as a proportion of funds under management?

c. What was the total cost of in-house administration expenses?

d. What was the cost of in-house administration expenses as a proportion of funds under management?

e. What was the total cost of any external administration expenses?

f. What was the cost of any external administration expenses as a proportion of funds under management?

g. What was the total cost of any external administration expenses to Related Parties?

h. What was the cost of any external administration expenses to Related Parties as a proportion of funds under management?

i. How many staff are employed in roles considered part of the administrative cost?

Over the last five financial years:

a. The number of rollover requests that the fund did not pay out to another fund for each year?

b. The average dollar value of a rollover for each year?

c. The value of any clawback accounts and/or funds held that is used to hold funds between financial years?

a. Does the fund maintain a reserve at least partially funded through insurance premiums, rebates from an insurance company (such as profit share arrangements) or tax benefits that have arisen from insurance?

b. The total value of that reserve?

c. The total value of tax rebates received from the ATO on insurance premiums?

In the context of building investments:

a. Have you completed assessments of the prevalence of flammable cladding across some properties?

b. Have you completed assessments of the prevalence of flammable cladding across all properties?

c. Have you taken any remediation to reduce your exposure to risk to identify flammable cladding, and if so, what?

d. Have you taken any remediation to reduce your exposure to risk to remove flammable cladding, and if so, what?

e. Do you hold any properties where insurance has been refused or are uninsured due to defective building construction such as cladding?

Governance:

a. How many trustee board members did the fund have?

b. What was the total salary of all trustee board members?

c. What was the average salary of all trustee board members?

d. Are there any performance-based assessments that determine trustee board remuneration, and if so what are they?

e. What was the salary of the trustee board chair?

f. What was the average length of service of all trustee board members?

g. What is the length of service of the longest serving trustee board member?

h. Are trustee board members asked whether they have conflicts of interest at each meeting, and if not, why not?

i. What is the conflict of interest policy for trustee board members?

j. Does your fund have a policy on gender diversity and/or balance for listed companies?

k. Does your board have gender balance?

In the context of the ACCC’s legal action and question for competition in monopoly infrastructure entities:

a. What are the implications for infrastructure investment returns if the ACCC is successful in its legal action?

b. Have you analysed your infrastructure investment portfolio to examine the risk of ACCC action to reduce anti-competitive monopoly of oligopoly pricing?

c. If so, can you provide details of the likely impact, and what is the project impact on revenue and income?

In dollar terms, for each of your superannuation products, can you please provide annual data for the past five financial years on average, for a member with a balance of $6,000, $50,000 and $150,000?

a. Investment fees

b. Administration fees

c. Indirect costs

d. Any other cost to a member which is incurred or foregone by way of a lesser return pre-unit price (but not included in the indirect cost ratio) including any other costs, charges, fees, direct or indirect benefits including any benefit by way of rebate, set-off, commission, in-kind, tax credit/offset retained, interest (or interest rebate) retained by any party involved in the management, custody, review, compliance, administration, servicing, asset consulting, valuation, operation and maintenance, financing, auditing, brokerage, execution, settlement, or otherwise of the assets in the fund, or their underlying assets.

e. An aggregate total of all fees mentioned above.

As a percentage of the value of the member account, for each of your superannuation products, can you please provide annual data for the past five financial years on average, for a member with a balance of $6,000, $50,000 and $150,000?

a. Investment fees

b. Administration fees

c. Indirect costs

d. Any other cost to a member which is incurred or foregone by way of a lesser return pre-unit price (but not included in the indirect cost ratio) including any other costs, charges, fees, direct or indirect benefits including any benefit by way of rebate, set-off, commission, in-kind, tax credit/offset retained, interest (or interest rebate) retained by any party involved in the management, custody, review, compliance, administration, servicing, asset consulting, valuation, operation and maintenance, financing, auditing, brokerage, execution, settlement, or otherwise of the assets in the fund, or their underlying assets.

e. An aggregate total of all fees mentioned above.

For the past five years:

a. What was the total cost of all advertising and/or marketing?

b. What was the total cost of all advertising and/or marketing per member?

c. What was the total cost of all advertising per new (FY19) member?

d. What was the total cost of all television advertising and/or marketing?

e. What was the total cost of all radio advertising and/or marketing?

f. What was the total cost of all print advertising and/or marketing?

g. What was the total cost of all online advertising and/or marketing?

h. How many in-house staff are employed in advertising and marketing roles?

i. How much was spent on engaging external advertising and marketing consultants?

j. Do you advertise and/or directly financial contribute to the New Daily?

Can you provide details if you have purchased the following over the past decade:

a. Google advertisements

b. Google search terms.

How will the overall fund performance be affected if:

a. The income return of unlisted assets declines?

b. The fund can no longer purchase unlisted assets onshore?

c. The fund can no longer purchase unlisted assets offshore?

Valuation methodologies:

a. Have you compared your valuation methodologies and assumptions for unlisted assets with other superannuation funds, and if so, what are the differences?

b. Are you confident that your valuation methodologies and assumptions for unlisted assets reflect their value to the fund, and how often are they reviewed?

c. How do you compare your valuations to listed investments, including, but not limited to, whether there is a cross check to stock prices for similar assets?

d. Have you ever calculated whether there would be a difference between valuations if unlisted assets were listed?

a. How many unlisted assets do you hold in the fund?

b. What value share are unlisted assets of the fund’s:

i. total value?
ii. total property value?

Discount rates:

a. For unlisted assets, do you use a consistent discount rate for income across all unlisted assets, or an asset-specific discount rate?

b. What is the discount rate you apply to the income from unlisted assets, and has it changed over the past decade, and if so, when and why?

Over the past decade:

a. Have you ever devalued an unlisted asset?

b. Have you ever devalued an unlisted asset by more than $10 million?

c. Have you ever devalued an unlisted asset by more than $50 million?

d. Have you ever devalued an unlisted asset by more than $100 million?

e. Please advise the companies and/or individual valuers that have valued your unlisted assets

For each year of the past decade:

a. How many fund members do you have?

b. How many financial planners do you have in total numbers, and as a member to financial planner ratio?

c. How many financial advisers do you have in total numbers, and as a member to financial planner ratio?

For each year of the past decade:

a. How much is charged for financial planning annually to fund members, and what is the average per fund member?

b. How much is charged for financial planning annually to funds, and what is the average per fund member?

c. How much is charged for financial advice annually to fund members, and what is the average per fund member?

d. How much is charged for financial advice annually to funds, and what is the average per fund member?

For each year of the past decade:

a. What is the cost of general advice annually, and what is the average per fund member?

b. What are the aggregate value of bonuses provided for general advice, and what is the average per adviser?

For each year of the past decade:

a. What is the cost of scaled advice annually, and what is the average per fund member?

b. What are the aggregate value of bonuses provided for scaled advice, and what is the average per adviser?

For each year of the past decade:

a. What is the cost of comprehensive advice annually, and what is the average per fund member?

b. What are the aggregate value of bonuses provided for comprehensive advice, and what is the average per adviser?

For each year of the past decade:

a. What is the cost of intra-fund advice annually, and what is the average per fund member?

b. What are the aggregate value of bonuses provided for intra-fund advice, and what is the average per adviser?

Over the past five years:

a. How many employees have been cautioned for misconduct?

b. How many employees have had a penalty (such as, but not limited to, loss of bonus) for misconduct?

c. How many employees have been terminated for misconduct?

d. How many employees have been cautioned for misconduct, as a share of all employees over that timeframe?

e. How many employees have had a penalty (such as, but not limited to, loss of bonus) for misconduct, as a share of all employees over that timeframe?

f. How many employees have been terminated for misconduct, as a share of all employees over that timeframe?

Responses to questions 63 - 76

(11 June 2020)
(PDF139KB)

Listed companies holding infrastructure assets have had write downs of around 40 per cent:

a. How does this compare to your write down of unlisted assets?

b. If there is a difference, why is there a difference?

Have you had any liquidity issues in honouring your obligations to members as a result of the:

a. recent decline in the share market?

b. permission by the Federal government to allow members to remove up to $10,000 per financial year if they lose their job?  

Liquidity management:

a. What is your fund’s process for complying with APRA’s prudential framework which requires trustees to have a liquidity management plan?

b. How is the plan being reported to the trustee directors?

c. Who is responsible for the day-to-day liquidity management for the fund?

Since 12 March 2020, has your fund provided any liquidity to:

a. REST?

b. Hostplus?

c. any other superannuation fund?

If so, for each fund, can you provide details of the amount, the date and the terms?

Responses to questions 77 - 90

(30 July 2020)
(PDF235KB)

Since 12 March 2020, has your fund loaned any cash to:

a. REST?

b. Hostplus?

c. any other superannuation fund?

If so, for each fund, can you provide details of the amount, the date and the terms?

Regarding any investments you have with IFM Investors, please provide the following:

a. The capital invested each year for the past five years.

b. The accumulated valuation of investments for the past five years.

c. The dividends received from those investments for the past five years.

Regarding any investments you have with ME Bank, please provide the following:

a. The capital invested each year for the past five years.

b. The accumulated valuation of investments for the past five years.

c. The dividends received from those investments for the past five years.

If you are an investor in ME Bank, have you individually (or in collaboration with other funds), ever commissioned reports into its valuation in the past decade?

a. And if so, how many reports and in what year?

b. Were any commissioned to be completed by the UK-based group, LEK?

c. And please provide copies.

According to reports in the Australian Financial Review superannuation fund, Hostplus, redefined the definition of ‘illiquid assets’ (‘Hostplus warned of liquidity “perfect storm”’, Australian Financial Review, 18 May 2020). Therefore, can you please advise:

a. How you define ‘illiquid assets’ within your fund, including details of holdings and timeframes?

b. How you define ‘liquid assets’ within your fund, including details of holdings and timeframes?

c. How long each of these definitions have been used?

d. What prompted any switch to these definitions?

e. What the prior definitions were before any switch?

Have you completed a skills audit in the past five years of the following:

a. Your board of directors?

b. Your investment committee?

c. And if not, why not?

d. And if so, presently what gaps are identified?

Prior to appointment, have employees fulfilling fiduciary roles had their investment performance track record assessed before fees?

a. And if not, why not?

b. And if not prior to appointment, have they following appointment?

c. And if so, on what timeframe?

Do you currently have an art collection?

a. If so, can you advise its current valuation?

b. If so, can you advise where it is stored and/or exhibited?

Do you engage proxy advisers?

a. What are the terms of engagement for proxy advisers?

b. To what extent are they empowered to act on behalf of the entity?

c. Does their advice get provided to the board?

d. How often is advice submitted to the board?

e. Is their advice formally adopted by the board?

f. Are their positions publicly stated?

g. How does the board assess these positions concurrent with their duties as trustees and the sole purpose test?

Are you currently, or have you previously been, a member or subscriber of the ACTU Members Connect Program?

a. If so, what is the timeframe of your membership?

b. What has been the annual fee year-on-year?

c. How have you assessed its value to your members?

Please provide the titles of all externally commissioned reports over the past five years that have reviewed any of the following:

a. Performance of funds.

b. Investment strategies for funds.

c. Conflicts of interest for funds.

Responses to questions 91 - 95

(30 July 2020)
(PDF632KB)

For each fund where more than 30 per cent of capital is managed by another entity, please complete the below table including:

a. The name of the fund.

b. The allocation of capital as a percentage of the total capital held by the fund.

c. The allocation of capital of the total capital held by the fund.

d. The entity managing the capital.

e. Whether you are a shareholder in that entity.

Please provide details of the following reduction to remuneration packages since 11 March 2020:

a. Board members.

b. The chief executive.

c. Executive management.

Since 1 January 2020, for each fund, please outline:

a. The date and value at the highest valuation of the fund?

b. The date and value at the lowest valuation of the fund?

c. The number of business days between the highest and lowest valuation for the fund?

d. The nominal value between the highest and lowest valuation for the fund?

e. The percentage value between the highest and lowest valuation for the fund?

f. The number of business days between the date of the ASX’s lowest valuation, and the lowest day for the valuation of the fund?

g. The number of business days between the date of the ASX’s lowest valuation, and the lowest valuation of unlisted assets in the fund?

h. What volume of switching of investments occurred between funds between the highest and lowest valuations?

i. What volume of switching between funds occurred in that time by trustees of the fund that are also members of the fund, between the highest and lowest valuations?

j. What volume of switching between funds occurred in that time by executives of the fund that are also members of the fund, between the highest and lowest valuations?

k. What volume of switching between funds occurred in that time by other employees of the fund that are also members of the fund, between the highest and lowest valuations?

l. What integrity measures were taken to prohibit trustees, executives and employees switching between funds from taking advantage of arbitrage of any gap between the lowest valuation date of the ASX and any revaluation of the fund?

Responses to
questions 96 - 100

(2 October 2020)
(PDF206KB)

On financial advisers providing non-intrafund advice (i.e. comprehensive advice - beyond the scope of intrafund advice) within the fund over the past five financial years:

a. How many do you employ (or are you paying for through outsourced arrangements)?

b. What is the revenue generated from these non-intrafund advisers?

c. How many financial advisers within the fund also provide intrafund advice?

d. If you have non-intrafund financial advisers within the fund also providing intrafund advice, how is their remuneration determined from different sources?

e. Is there any cross-subsidisation for non-intrafund financial advisers within the fund from activities funded through intrafund advice?

f. Is there any cross-subsidisation for financial advisers from intrafund advice to non-intrafund financial advisers within the fund?

g. What is the total budgeted cost and actuals for financial advisers?

h. What is the remuneration level/range for the financial advisers employed to provide non-intrafund advice to your members?

i. What is the aggregated cost of their remuneration?

ii. What is the aggregated cost for their employment?

iii. What is the aggregated cost for their on-costs, including but not limited to, superannuation, leave, training support and office space?

iv. What is the aggregated cost for marketing their services?

v. What is the aggregated cost for administrative support services?

vi. What is the aggregated cost for professional insurance and indemnity?

vii. What is the aggregated cost for compliance oversight?

viii. What is the aggregated cost for legal oversight?

ix. What is the aggregated cost for other regulatory oversight?

x. What is the aggregated cost for the unit, including overheads, that provides financial advice within the fund?

On financial advisers providing intrafund advice (i.e. strictly limited to advice on your super fund for the member only - not spouse) within your fund over the last five financial years:

a. How many do you employ (or are you paying for through outsourced arrangements)?

b. What is the remuneration level/range for the financial advisers employed to provide intrafund advice to your members?

i. What is the aggregated cost of their remuneration?

ii. What is the aggregated cost for their employment?

iii. What is the aggregated cost for their on-costs, including but not limited to, superannuation, leave, training support and office space?

iv. What is the aggregated cost for marketing their services?

v. What is the aggregated cost for administrative support services?

vi. What is the aggregated cost for professional insurance and indemnity?

vii. What is the aggregated cost for compliance oversight?

viii. What is the aggregated cost for legal oversight?

ix. What is the aggregated cost for other regulatory oversight?

x. What is the aggregated cost for the unit, including overheads, that provides intrafund advice?

c. What is the revenue that intrafund advisers have generated?

d. How many financial advisers providing intrafund advice also provide it within the fund?

e. If you have financial advisers providing intrafund advice also providing it within the fund, how is their remuneration determined from different sources?

f. Is there any cross-subsidisation for financial advisers providing intrafund advice from revenue funded through activities within the fund?

g. What is the total budgeted cost and actuals for the intrafund advice unit?

h. What is the revenue generated from these financial advisers?

i. Within your fund, is there any cross-subsidisation for intrafund advice services?

Do you allow members to use their funds to pay for:

a. Financial advice?

b. Internal financial advisers?

c. External financial advisers?

Please advise the total remuneration package of your:

a. company secretary, and

b. Chief Executive Officer, including:

i. total remuneration

ii. base salary

iii. annual bonuses

iv. deferred bonuses

v. equity or other options

vi. additional compensation not covered in the above.

Responses to
questions 101 - 119

(22 December 2020)
(PDF780KB)

For each year of the past decade, please advise the:

a. annual remuneration of the average worker who contributes to your fund

b. average annual superannuation contribution from an employee to your fund

c. multiple your CEO is remunerated compared to the annual remuneration of the average worker who contributes to your fund.

In the context of marketing and advertising campaigns:

a. How many is your fund currently running individually, or in collaboration with others?

b. How many have run, or are currently running since the beginning of calendar year 2020?

c. What is the actual cost for each campaign (including development, production, broadcasting, and distribution) to 30 June 2020?

d. What is the actual cost for each campaign (including development, production, broadcasting, and distribution) budgeted?

e. What is the budgeted cost for each campaign (including development, production, broadcasting, and distribution) from 1 July 2020 – 31 December 2020?

f. What is the budgeted cost for any existing or proposed campaigns (including development, production, broadcasting, and distribution) for the period 1 January 2021 – 30 June 2021?

g. What is the budgeted cost for any existing or proposed campaigns (including development, production, broadcasting, and distribution) for the period 1 July 2021 – 31 December 2021?

For each of the following categories, please provide the percentages of employees that are women, men, or who identify otherwise:

a. all employees

b. non-executive employees

c. executive employees

d. senior executive employees.

Do you have a target for the employment of:

a. women as a share of:

i. all employees?

ii. executive employees?

iii. senior executive employees?

b. people who are gender non-binary as a share of:

i. all employees?

ii. executive employees?

iii. senior executive employees?

Since the introduction of Superstream, which has standardised the transfer of funds, has there been:

a. A reduction in the cost to the fund for transferring funds, and if so, by how much?

b. A reduction in the fees charged to members reflecting any saving, and if so, by how much?

Greenhouse gas emissions

a. Does your fund have an internal target for your own greenhouse gas emissions footprint by:

i. 2030?

ii. 2035?

iii. 2040?

iv. 2045?

v. 2050?

b. Does your fund have a target for reducing greenhouse gas emissions from investments by:

i. 2030?

ii. 2035?

iii. 2040?

iv. 2045?

v. 2050?

c. Does your fund intend to divest from investments if they do not reach their greenhouse gas emissions reduction targets by:

i. 2030?

ii. 2035?

iii. 2040?

iv. 2045?

v. 2050?

The New Daily

a. Have you ever completed a cost benefit analysis of The New Daily to your fund?

i. If so, when did you complete this cost benefit analysis?

ii. Please provide a copy of the cost benefit analysis.

b. Have you ever completed a cost benefit analysis of The New Daily to your members?

i. If so, when did you complete your cost benefit analysis of the New Daily to your members?

ii. Please provide a copy of the cost benefit analysis.

Financial advisers remuneration

a. Are your financial advisers paid:

i. a base salary?

ii. non-salaried remuneration, including bonuses?

b. Are your financial advisers, who are only remunerated with a base salary, eligible to provide:

i. personal advice?

ii. general advice?

Have any technology innovations within the fund reduced the cost of operating the fund over the past decade?

If so, please outline:

a. the technological innovations

b. the cost saving

c. the cost saving passed through to fees charged to members.

Valuations

a. What data is provided to valuation teams to assess the value of unlisted assets?

b. When the fund provides data to valuation teams to assess the value of unlisted assets, does this include internal modelling of asset valuations?

c. What assumptions are provided to valuation teams when assessing the value of unlisted assets?

d. When valuation teams assess the value of unlisted assets, do they solely take account of past performance?

e. When valuation teams assess the value of unlisted assets, what weighting do they take on the projected value of the market for such unlisted assets to inform their valuations?

f. For the past decade can you please complete the below table for each unlisted asset valued under your valuation policy.

In the Financial Services Royal Commission documentation an ‘Audit and Risk Management Committee’ paper was compiled for CBUS (‘Review of payments made to sponsoring organisations’—Exhibit 5.368).

Please advise how many times, over the last decade, such a paper, or equivalent, has been prepared for:

a. your Board?

b. a Board subcommittee?

c. executive management?

Over the past decade, how many non-disclosure agreements have you agreed to in relation to:

a. human resources issues?

b. sexual harassment issues?

Do you use an internal clearing house to receive the superannuation payments from employers, or their payroll representatives, before they are allocated to an individual member’s account and/or fund?

If so:

a. What is the name of the clearing house?

b. Why do you use a clearing house?

c. How much does it cost annually to use the clearing house?

d. How much does it cost annually to each member to use the clearing house?

e. What happens to interest accrued from funds held in the clearing house?

f. What happens to non-interest income and/or capital gains accrued from funds held in the clearing house?

Do you use an external clearing house to receive the superannuation payments from employers, or their payroll representatives, before they are allocated to an individual member’s account and/or fund?

If so:

a. What is the name of the clearing house?

b. Who owns the clearing house?

c. Why do you use an external clearing house?

d. How much does it cost annually to use the external clearing house?

e. How much does it cost annually to each member to use the external clearing house?

f. What happens to non-interest income and/or capital gains accrued from funds held in the external clearing house?

If you use an internal clearing house please outline when money is received into the clearing house:

a. On average, how long does it stay in the clearing house before it:

i. is allocated to a member’s account and/or fund?

ii. is allocated to purchase units for a member’s account and/or fund?

iii. appears in a member’s account and/or fund statement and/or online record?

b. What is the longest time that it has stayed in the clearing house before it:

i. is allocated to a member’s account and/or fund?

ii. is allocated to purchase units for a member’s account and/or fund?

iii. appears in a member’s account and/or fund statement and/or online record?

c. What is the shortest time that it has stayed in the clearing house before it:

i. is allocated to a member’s account and/or fund?

ii. is allocated to purchase units for a member’s account and/or fund?

iii. appears in a member’s account and/or fund statement and/or online record?

d. For interest accrued from holding funds in the clearing house for the member, is it then subsequently allocated to:

i. the individual member’s account and/or fund?

ii. a different account and/or fund? If so, what is its name?

e. For non-interest income and/or capital gains accrued from holding funds in the clearing house for the member, is it then subsequently allocated to:

i. the individual member’s account and/or fund?

ii. a different account and/or fund? If so, what is its name?

If you use an external clearing house please outline when money is received into the clearing house:

a. On average, how long does it stay in the clearing house before it:

i. is allocated to a member’s account and/or fund?

ii. is allocated to purchase units for a member’s account and/or fund?

iii. appears in a member’s account and/or fund statement and/or online record?

b. What is the longest time that it has stayed in the clearing house before it:

i. is allocated to a member’s account and/or fund?

ii. is allocated to purchase units for a member’s account and/or fund?

iii. appears in a member’s account and/or fund statement and/or online record?

c. What is the shortest time that it has stayed in the clearing house before it:

i. is allocated to a member’s account and/or fund?

ii. is allocated to purchase units for a member’s account and/or fund?

iii. appears in a member’s account and/or fund statement and/or online record?

d. For interest accrued from holding funds in the clearing house for the member, is it then subsequently allocated to:

i. the individual member’s account and/or fund?

ii. a different account and/or fund? If so, what is its name?

e. For non-interest income and/or capital gains accrued from holding funds in the clearing house for the member, is it then subsequently allocated to:

i. the individual member’s account and/or fund?

ii. a different account and/or fund? If so, what is its name?

In reference to the original publication of the article ‘CEOs push to reopen faster’ in the Australian Financial Review on 20 October 2020 which states:

Meanwhile, restaurateur Chris Lucas, pub owner and former AFL player Paul Dimattina and CSL chairman Brian McNamee all spoke of repercussions from elements of the labour movement for criticising the state government over the failures which led to the crisis and the subsequent slow pace of reopening the economy. Union-aligned industry superannuation fund managers have pressured Dr McNamee to stop his outspoken criticisms of the state government lockdown, even though he has repeatedly said he is speaking in a personal capacity and not for the company.

In the context of confronting, bullying or intimidatory workplace cultures, please advise:

a. has the Chair of your fund been in contact through any medium with Dr McNamee or his office since 5 August 2020, and if so please advise the name of the person who made contact and the nature of any communications.

b. have board members of your fund been in contact through any medium with Dr McNamee or his office since 5 August 2020, and if so please advise the name(s) of the person(s) who made contact and the nature of any communications.

c. has the CEO of your fund been in contact through any medium with Dr McNamee or his office since 5 August 2020, and if so please advise the name of the person who made contact and the nature of any communications.

d. have senior executives of your fund been in contact through any medium with Dr McNamee or his office since 5 August, and if so please advise the name(s) of the person(s) who made contact and the nature of any communications.

In dollar terms, how much advertising space did your fund book (directly or indirectly through a broker or agent) in the second half of 2020 that was unused on:

a. radio?

b. television?

c. print?

Responses to
questions 121- 134

(16 April 2021)
(PDF33KB)

In minutes, how much advertising space did your fund book (directly or indirectly through a broker or agent) in the second half of 2020 that was unused on:

a. radio?

b. television?

c. print?

What is your current policy on whether your funds are permitted to invest in:

a. residential property?

b. Build-to-Rent housing?

c. social housing?

Have you ever:

a. completed internal research that includes retirement outcomes for fund members who own their home in retirement, compared to those who do not?

b. commissioned external research that includes retirement outcomes for fund members who own their home in retirement, compared to those who do not?

For the last five financial years, please complete the table for investments across all your funds in all forms of residential property:

a. in nominal value

b. as a share of your total portfolio

c. the average return on investment.

For the last five financial years, please complete the table for investments across all your funds in Build-to-Rent property:

a. in nominal value

b. as a share of your total portfolio

c. the average return on investment.

For the last five financial years, please complete the table for investments across all your funds in social housing property:

a. in nominal value

b. as a share of your total portfolio

c. the average return on investment.

Please outline your policy on:

a. Fund members using their superannuation fund for a deposit to buy their first home.

b. Retirees using their superannuation to:

i. renovate their home

ii. pay rent.            

Within your fund, what percentage of retirees in each of the last five financial years used their superannuation to:

a. renovate their home?

b. clear their remaining mortgage?

Insurance premiums

a. Have you ever deducted insurance premiums from fund members for insurance policies that they are not covered by?

b. Have you ever completed an audit to identify if insurance premiums have been deducted from fund members for insurance policies that they are not covered by?

Material distributed to members

a. Have you ever distributed materials to members that state and/or suggest that:

i. members have coverage under insurance policies that they do not have?

ii. members are required to keep a minimum balance in their superannuation fund?

iii. their employer may be unwilling to contribute to another superannuation fund?

iv. members require a statement of any kind from their employer to move away from your fund?

b. Have you ever completed an audit of materials distributed to members that state and/or suggest that members have coverage under insurance policies that they do not have?

c. Have you ever completed an audit to establish whether you have distributed materials to members that state and/or suggest that:

i. they are required to keep a minimum balance in their superannuation fund?

ii. their employer may be unwilling to contribute to another superannuation fund?

iii. they require a statement of any kind from their employer to move away from your fund?

Please provide as separated data, what the base salary and bonuses were, or are set to be, paid in the 2019/2020 and 2020/21 financial year for your:

a. Chief Executive Officer or equivalent?

b. Chief Investment Officer or equivalent?

Responses to questions 136 - 142

(2 September 2021)
(PDF141KB)

Property investments

a. Do you have any current investments in the National Housing Finance and Investment Corporation? If so, what is the size of your investments?

b. Please provide information on the rental income for any residential property investments held for each year for the last five financial years.

Subscriptions to The New Daily

a. Has your fund ever considered subscribing your members to The New Daily through an opt-out model? If so:

i. Was this proposed initially internally, or externally?
ii. Who proposed it?
iii. Who approved it?
iv. What was the approval process?
v. What legal advice was sought?
vi. On what date did it proceed, or is it proposed to proceed?

b. Have the following groups ever enquired or requested your fund to subscribe your members to The New Daily:

i. Industry Super Holdings?
ii. The New Daily?

What arrangements, including donations, commissions, marketing expenditure or partnerships, do you have that lead to payments to research organisations or ‘think tanks’?

Please provide:

a. Names of the think tanks.

b. Payments made over the last five years.

According to the Australian Financial Review (IFM’s Tandem leaves workers in the lurch, 7 July 2021), IFM Investors have invested in a business that has left them wholly owning a subsidiary, Tandem Networks, that avoids them paying out the full entitlements of subcontractor. Therefore, if you are an owner of IFM Investors:

a. Do you think it is acceptable that an investment made by your investment vehicle dishonours contractual arrangements with subcontractors?

b. What inquiries have been made to ensure that subcontractors are being paid?

c. What steps do you expect IFM Investors to go through should they not honour entitlements to subcontractors?

d. Would you divest from IFM Investors should they not honour entitlements to subcontractors?

At the House Economics superannuation hearing on 8 July 2021 representatives of Australian Super and CBUS outlined they were not aware that IFM Investors (a company wholly owned by industry funds) had paid a bonus of $12m, and were asked whether they had asked questions about the bonus and the bonus structures within IFM Investors.

According to the Australian Financial Review (IFM Investors gives $12.7m bonus to UK Director, 14 February 2020) a bonus of $12.7 million bonus was paid.
According to the Sydney Morning Herald (A lot of bling: Industry shocked at $36 million bonus allegation, 22 March 2019) bonus structures existed to allow for bonuses of up to $36m to be paid.

Therefore, if you are an owner of IFM Investors, please advise:

a. What inquiries have been made, or will be made, about bonuses of that size with IFM Investors?

b. What information you have sought, or will seek, from IFM investors about bonus structures within IFM Investors?

Response                  

(Publication date)

Please provide the details of any fund member briefings where it was possible to ask fund managers, executives or directors questions over the past five years.

Responses to
questions 1 - 62

(2 April 2020)(PDF3,370KB)

Over the last five financial years:

a. What was the average dollar amount deducted for administration and asset management fees per member, across all fund products? (please do not include insurance fees)

b. What was the cost (%) of fund administration expenses as a proportion of funds under management?

c. What was the total cost of in-house administration expenses?

d. What was the cost of in-house administration expenses as a proportion of funds under management?

e. What was the total cost of any external administration expenses?

f. What was the cost of any external administration expenses as a proportion of funds under management?

g. What was the total cost of any external administration expenses to Related Parties?

h. What was the cost of any external administration expenses to Related Parties as a proportion of funds under management?

i. How many staff are employed in roles considered part of the administrative cost?

Over the last five financial years:

a. The number of rollover requests that the fund did not pay out to another fund for each year?

b. The average dollar value of a rollover for each year?

c. The value of any clawback accounts and/or funds held that is used to hold funds between financial years?

a. Does the fund maintain a reserve at least partially funded through insurance premiums, rebates from an insurance company (such as profit share arrangements) or tax benefits that have arisen from insurance?

b. The total value of that reserve?

c. The total value of tax rebates received from the ATO on insurance premiums?

In the context of building investments:

a. Have you completed assessments of the prevalence of flammable cladding across some properties?

b. Have you completed assessments of the prevalence of flammable cladding across all properties?

c. Have you taken any remediation to reduce your exposure to risk to identify flammable cladding, and if so, what?

d. Have you taken any remediation to reduce your exposure to risk to remove flammable cladding, and if so, what?

e. Do you hold any properties where insurance has been refused or are uninsured due to defective building construction such as cladding?

Governance:

a. How many trustee board members did the fund have?

b. What was the total salary of all trustee board members?

c. What was the average salary of all trustee board members?

d. Are there any performance-based assessments that determine trustee board remuneration, and if so what are they?

e. What was the salary of the trustee board chair?

f. What was the average length of service of all trustee board members?

g. What is the length of service of the longest serving trustee board member?

h. Are trustee board members asked whether they have conflicts of interest at each meeting, and if not, why not?

i. What is the conflict of interest policy for trustee board members?

j. Does your fund have a policy on gender diversity and/or balance for listed companies?

k. Does your board have gender balance?

In the context of the ACCC’s legal action and question for competition in monopoly infrastructure entities:

a. What are the implications for infrastructure investment returns if the ACCC is successful in its legal action?

b. Have you analysed your infrastructure investment portfolio to examine the risk of ACCC action to reduce anti-competitive monopoly of oligopoly pricing?

c. If so, can you provide details of the likely impact, and what is the project impact on revenue and income?

In dollar terms, for each of your superannuation products, can you please provide annual data for the past five financial years on average, for a member with a balance of $6,000, $50,000 and $150,000?

a. Investment fees

b. Administration fees

c. Indirect costs

d. Any other cost to a member which is incurred or foregone by way of a lesser return pre-unit price (but not included in the indirect cost ratio) including any other costs, charges, fees, direct or indirect benefits including any benefit by way of rebate, set-off, commission, in-kind, tax credit/offset retained, interest (or interest rebate) retained by any party involved in the management, custody, review, compliance, administration, servicing, asset consulting, valuation, operation and maintenance, financing, auditing, brokerage, execution, settlement, or otherwise of the assets in the fund, or their underlying assets.

e. An aggregate total of all fees mentioned above.

As a percentage of the value of the member account, for each of your superannuation products, can you please provide annual data for the past five financial years on average, for a member with a balance of $6,000, $50,000 and $150,000?

a. Investment fees

b. Administration fees

c. Indirect costs

d. Any other cost to a member which is incurred or foregone by way of a lesser return pre-unit price (but not included in the indirect cost ratio) including any other costs, charges, fees, direct or indirect benefits including any benefit by way of rebate, set-off, commission, in-kind, tax credit/offset retained, interest (or interest rebate) retained by any party involved in the management, custody, review, compliance, administration, servicing, asset consulting, valuation, operation and maintenance, financing, auditing, brokerage, execution, settlement, or otherwise of the assets in the fund, or their underlying assets.

e. An aggregate total of all fees mentioned above.

Can you provide details if you have purchased the following over the past decade:

a. Google advertisements

b. Google search terms.

How will the overall fund performance be affected if:

a. The income return of unlisted assets declines?

b. The fund can no longer purchase unlisted assets onshore?

c. The fund can no longer purchase unlisted assets offshore?

Valuation methodologies:

a. Have you compared your valuation methodologies and assumptions for unlisted assets with other superannuation funds, and if so, what are the differences?

b. Are you confident that your valuation methodologies and assumptions for unlisted assets reflect their value to the fund, and how often are they reviewed?

c. How do you compare your valuations to listed investments, including, but not limited to, whether there is a cross check to stock prices for similar assets?

d. Have you ever calculated whether there would be a difference between valuations if unlisted assets were listed?

Discount rates:

a. For unlisted assets, do you use a consistent discount rate for income across all unlisted assets, or an asset-specific discount rate?

b. What is the discount rate you apply to the income from unlisted assets, and has it changed over the past decade, and if so, when and why?

Over the past decade:

a. Have you ever devalued an unlisted asset?

b. Have you ever devalued an unlisted asset by more than $10 million?

c. Have you ever devalued an unlisted asset by more than $50 million?

d. Have you ever devalued an unlisted asset by more than $100 million?

e. Please advise the companies and/or individual valuers that have valued your unlisted assets

Responses to questions 63 - 76

(22 May 2020)(PDF202KB)

Listed companies holding infrastructure assets have had write downs of around 40 per cent:

a. How does this compare to your write down of unlisted assets?

b. If there is a difference, why is there a difference?

Have you had any liquidity issues in honouring your obligations to members as a result of the:

a. recent decline in the share market?

b. permission by the Federal government to allow members to remove up to $10,000 per financial year if they lose their job?

Liquidity management:

a. What is your fund’s process for complying with APRA’s prudential framework which requires trustees to have a liquidity management plan?

b. How is the plan being reported to the trustee directors?

c. Who is responsible for the day-to-day liquidity management for the fund?

Since 12 March 2020, has your fund provided any liquidity to:

a. REST?
b. Hostplus?
c. any other superannuation fund?

If so, for each fund, can you provide details of the amount, the date and the terms?

Responses to questions 77 - 90

(26 June 2020)
(PDF242KB)

Since 12 March 2020, has your fund loaned any cash to:

a. REST?
b. Hostplus?
c. any other superannuation fund?

If so, for each fund, can you provide details of the amount, the date and the terms?

If you are an investor in ME Bank, have you individually (or in collaboration with other funds), ever commissioned reports into its valuation in the past decade?

a. And if so, how many reports and in what year?

b. Were any commissioned to be completed by the UK-based group, LEK?

c. And please provide copies.

Do you currently have an art collection?

a. If so, can you advise its current valuation?

b. If so, can you advise where it is stored and/or exhibited?

Do you engage proxy advisers?

a. What are the terms of engagement for proxy advisers?

b. To what extent are they empowered to act on behalf of the entity?

c. Does their advice get provided to the board?

d. How often is advice submitted to the board?

e. Is their advice formally adopted by the board?

f. Are their positions publicly stated?

g. How does the board assess these positions concurrent with their duties as trustees and the sole purpose test?

Are you currently, or have you previously been, a member or subscriber of the ACTU Members Connect Program?

a. If so, what is the timeframe of your membership?

b. What has been the annual fee year-on-year?

c. How have you assessed its value to your members?

Responses to questions 93 - 94

(14 August 2020)
(PDF98KB)

Please provide details of the following reduction to remuneration packages since 11 March 2020:

a. Board members.

b. The chief executive.

c. Executive management.

Do you allow members to use their funds to pay for:

a. Financial advice?

b. Internal financial advisers?

c. External financial advisers?

Responses to questions 99 - 100

(28 August 2020)
(PDF93KB)

Please advise the total remuneration package of your:

a. company secretary, and

b. Chief Executive Officer, including:

i. total remuneration

ii. base salary

iii. annual bonuses

iv. deferred bonuses

v. equity or other options

vi. additional compensation not covered in the above.

Responses to questions 109 - 125

(18 November 2020)
(PDF220KB)

For each year of the past decade, please advise the:

a. annual remuneration of the average worker who contributes to your fund

b. average annual superannuation contribution from an employee to your fund

c. multiple your CEO is remunerated compared to the annual remuneration of the average worker who contributes to your fund.

For each of the following categories, please provide the percentages of employees that are women, men, or who identify otherwise:

a. all employees

b. non-executive employees

c. executive employees

d. senior executive employees.

Do you have a target for the employment of:

a. women as a share of:

i. all employees?

ii. executive employees?

iii. senior executive employees?

b. people who are gender non-binary as a share of:

i. all employees?

ii. executive employees?

iii. senior executive employees?            

Since the introduction of Superstream, which has standardised the transfer of funds, has there been:

a. A reduction in the cost to the fund for transferring funds, and if so, by how much?

b. A reduction in the fees charged to members reflecting any saving, and if so, by how much?

Greenhouse gas emissions

a. Does your fund have an internal target for your own greenhouse gas emissions footprint by:

i. 2030?

ii. 2035?

iii. 2040?

iv. 2045?

v. 2050?

b. Does your fund have a target for reducing greenhouse gas emissions from investments by:

i. 2030?

ii. 2035?

iii. 2040?

iv. 2045?

v. 2050?

c. Does your fund intend to divest from investments if they do not reach their greenhouse gas emissions reduction targets by:

i. 2030?

ii. 2035?

iii. 2040?

iv. 2045?

v. 2050?

The New Daily

a. Have you ever completed a cost benefit analysis of The New Daily to your fund?

i. If so, when did you complete this cost benefit analysis?

ii. Please provide a copy of the cost benefit analysis.

b. Have you ever completed a cost benefit analysis of The New Daily to your members?

i. If so, when did you complete your cost benefit analysis of the New Daily to your members?

ii. Please provide a copy of the cost benefit analysis.

Financial advisers remuneration

a. Are your financial advisers paid:

i. a base salary?

ii. non-salaried remuneration, including bonuses?

b. Are your financial advisers, who are only remunerated with a base salary, eligible to provide:

i. personal advice?

ii. general advice?

Have any technology innovations within the fund reduced the cost of operating the fund over the past decade?

If so, please outline:

a. the technological innovations

b. the cost saving

c. the cost saving passed through to fees charged to members.

Do you use an internal clearing house to receive the superannuation payments from employers, or their payroll representatives, before they are allocated to an individual member’s account and/or fund?

If so:

a. What is the name of the clearing house?

b. Why do you use a clearing house?

c. How much does it cost annually to use the clearing house?

d. How much does it cost annually to each member to use the clearing house?

e. What happens to interest accrued from funds held in the clearing house?

f. What happens to non-interest income and/or capital gains accrued from funds held in the clearing house?

Do you use an external clearing house to receive the superannuation payments from employers, or their payroll representatives, before they are allocated to an individual member’s account and/or fund?

If so:

a. What is the name of the clearing house?

b. Who owns the clearing house?

c. Why do you use an external clearing house?

d. How much does it cost annually to use the external clearing house?

e. How much does it cost annually to each member to use the external clearing house?

f. What happens to non-interest income and/or capital gains accrued from funds held in the external clearing house?

If you use an internal clearing house please outline when money is received into the clearing house:

a. On average, how long does it stay in the clearing house before it:

i. is allocated to a member’s account and/or fund?

ii. is allocated to purchase units for a member’s account and/or fund?

iii. appears in a member’s account and/or fund statement and/or online record?

b. What is the longest time that it has stayed in the clearing house before it:

i. is allocated to a member’s account and/or fund?

ii. is allocated to purchase units for a member’s account and/or fund?

iii. appears in a member’s account and/or fund statement and/or online record?

c. What is the shortest time that it has stayed in the clearing house before it:

i. is allocated to a member’s account and/or fund?

ii. is allocated to purchase units for a member’s account and/or fund?

iii. appears in a member’s account and/or fund statement and/or online record?

d. For interest accrued from holding funds in the clearing house for the member, is it then subsequently allocated to:

i. the individual member’s account and/or fund?

ii. a different account and/or fund? If so, what is its name?

e. For non-interest income and/or capital gains accrued from holding funds in the clearing house for the member, is it then subsequently allocated to:

i. the individual member’s account and/or fund?

ii. a different account and/or fund? If so, what is its name?            

If you use an external clearing house please outline when money is received into the clearing house:

a. On average, how long does it stay in the clearing house before it:

i. is allocated to a member’s account and/or fund?

ii. is allocated to purchase units for a member’s account and/or fund?

iii. appears in a member’s account and/or fund statement and/or online record?

b. What is the longest time that it has stayed in the clearing house before it:

i. is allocated to a member’s account and/or fund?

ii. is allocated to purchase units for a member’s account and/or fund?

iii. appears in a member’s account and/or fund statement and/or online record?

c. What is the shortest time that it has stayed in the clearing house before it:

i. is allocated to a member’s account and/or fund?

ii. is allocated to purchase units for a member’s account and/or fund?

iii. appears in a member’s account and/or fund statement and/or online record?

d. For interest accrued from holding funds in the clearing house for the member, is it then subsequently allocated to:

i. the individual member’s account and/or fund?

ii. a different account and/or fund? If so, what is its name?

e. For non-interest income and/or capital gains accrued from holding funds in the clearing house for the member, is it then subsequently allocated to:

i. the individual member’s account and/or fund?

ii. a different account and/or fund? If so, what is its name?

In reference to the original publication of the article ‘CEOs push to reopen faster’ in the Australian Financial Review on 20 October 2020 which states:

Meanwhile, restaurateur Chris Lucas, pub owner and former AFL player Paul Dimattina and CSL chairman Brian McNamee all spoke of repercussions from elements of the labour movement for criticising the state government over the failures which led to the crisis and the subsequent slow pace of reopening the economy. Union-aligned industry superannuation fund managers have pressured Dr McNamee to stop his outspoken criticisms of the state government lockdown, even though he has repeatedly said he is speaking in a personal capacity and not for the company.

In the context of confronting, bullying or intimidatory workplace cultures, please advise:

a. has the Chair of your fund been in contact through any medium with Dr McNamee or his office since 5 August 2020, and if so please advise the name of the person who made contact and the nature of any communications.

b. have board members of your fund been in contact through any medium with Dr McNamee or his office since 5 August 2020, and if so please advise the name(s) of the person(s) who made contact and the nature of any communications.

c. has the CEO of your fund been in contact through any medium with Dr McNamee or his office since 5 August 2020, and if so please advise the name of the person who made contact and the nature of any communications.

d. have senior executives of your fund been in contact through any medium with Dr McNamee or his office since 5 August, and if so please advise the name(s) of the person(s) who made contact and the nature of any communications.

Responses to questions 135 - 139

(9 April 2021)
(PDF127KB)

For the last five financial years, please complete the table for investments across all your funds in all forms of residential property:

a. in nominal value

b. as a share of your total portfolio

c. the average return on investment.

For the last five financial years, please complete the table for investments across all your funds in Build-to-Rent property:

a. in nominal value

b. as a share of your total portfolio

c. the average return on investment.

For the last five financial years, please complete the table for investments across all your funds in social housing property:

a. in nominal value

b. as a share of your total portfolio

c. the average return on investment.

Please outline your policy on:

a. Fund members using their superannuation fund for a deposit to buy their first home.

b. Retirees using their superannuation to:

i. renovate their home

ii. pay rent.

Please provide as separated data, what the base salary and bonuses were, or are set to be, paid in the 2019/2020 and 2020/21 financial year for your:

a. Chief Executive Officer or equivalent?

b. Chief Investment Officer or equivalent?

Responses to questions 144 - 150

(12 August 2021)
(PDF158KB)

Property investments

a. Do you have any current investments in the National Housing Finance and Investment Corporation? If so, what is the size of your investments?

b. Please provide information on the rental income for any residential property investments held for each year for the last five financial years.

Subscriptions to The New Daily

a. Has your fund ever considered subscribing your members to The New Daily through an opt-out model? If so:

i. Was this proposed initially internally, or externally?

ii. Who proposed it?

iii. Who approved it?

iv. What was the approval process?

v. What legal advice was sought?

vi. On what date did it proceed, or is it proposed to proceed?

b. Have the following groups ever enquired or requested your fund to subscribe your members to The New Daily:

i. Industry Super Holdings?

ii. The New Daily?

What arrangements, including donations, commissions, marketing expenditure or partnerships, do you have that lead to payments to research organisations or ‘think tanks’?

Please provide:

a. Names of the think tanks.

b. Payments made over the last five years.

According to the Australian Financial Review (IFM’s Tandem leaves workers in the lurch, 7 July 2021), IFM Investors have invested in a business that has left them wholly owning a subsidiary, Tandem Networks, that avoids them paying out the full entitlements of subcontractor. Therefore, if you are an owner of IFM Investors:

a. Do you think it is acceptable that an investment made by your investment vehicle dishonours contractual arrangements with subcontractors?

b. What inquiries have been made to ensure that subcontractors are being paid?

c. What steps do you expect IFM Investors to go through should they not honour entitlements to subcontractors?

d. Would you divest from IFM Investors should they not honour entitlements to subcontractors?

At the House Economics superannuation hearing on 8 July 2021 representatives of Australian Super and CBUS outlined they were not aware that IFM Investors (a company wholly owned by industry funds) had paid a bonus of $12m, and were asked whether they had asked questions about the bonus and the bonus structures within IFM Investors.

According to the Australian Financial Review (IFM Investors gives $12.7m bonus to UK Director, 14 February 2020) a bonus of $12.7 million bonus was paid.
According to the Sydney Morning Herald (A lot of bling: Industry shocked at $36 million bonus allegation, 22 March 2019) bonus structures existed to allow for bonuses of up to $36m to be paid.

Therefore, if you are an owner of IFM Investors, please advise:

a. What inquiries have been made, or will be made, about bonuses of that size with IFM Investors?

b. What information you have sought, or will seek, from IFM investors about bonus structures within IFM Investors?

Response            

(Publication date)

Please provide the details of any fund member briefings where it was possible to ask fund managers, executives or directors questions over the past five years.

Responses to questions 1 - 62

(31 March 2020)(PDF5,426KB)

For the past five years the total value in dollars and as a percentage of the total value of a fund:

a. Listed investments.

b. Unlisted investments.

c. Total investments.

For the past five years the total value in dollars and as a percentage of the total return for the fund:

a. Listed investments.

b. Unlisted investments.

c. Total investments.

Details of each individual asset currently held at a value other than available listed market prices (an unlisted asset) wholly owned by the fund or funds under your control, including:

a. The asset name and location.

b. The frequency of the revaluation of the asset.

c. The most recent valuation.

d. A copy of that valuation.

e. The methodology used for its valuation.

f. Whether the valuation was completed internally or externally.

g. The details of any external party involved in the valuation.

Details of each individual asset currently held at a value other than available listed market prices (an unlisted asset) partly owned by the fund or funds under your control, including:

a. The asset name and location.

b. The frequency of the revaluation of the asset.

c. The most recent valuation.

d. A copy of that valuation.

e. The methodology used for its valuation.

f. Whether the valuation was completed internally or externally.

Details of costs for advertising campaigns for the past five years, including:

a. The companies invited to tender for all or parts of any advertising campaign.

b. The companies awarded campaigns.

c. The total cost of each campaign.

d. The cost of the campaign’s development.

e. Broadcasting (television, radio and internet) and publishing costs.

f. Assessment reports of the efficacy of campaigns in either retaining or gaining new members.

Over the last five financial years:

a. What is the total budget for all costs associated with the fund?

b. What were the total assets under management?

c. What are the total number of employees?

d. What are the total number of contractors?

e. What are the total number of externally hired contracts, and their value?

Over the last five financial years:

a. What is the total number of member accounts?

b. What is the total increase in the number of members as a result of the fund’s default status?

c. What is the total increase in the number of members through voluntary adoption or switching?

d. What was the average member balance?

e. What was the average dollar amount deducted in insurance fees per member, across all fund products in dollar terms and as a share of a member account?

f. What was the total number of inactive accounts? (Please use the APRA definition: no contributions for two years)

Over the last five financial years:

a. What was the average dollar amount deducted for administration and asset management fees per member, across all fund products? (please do not include insurance fees)

b. What was the cost (%) of fund administration expenses as a proportion of funds under management?

c. What was the total cost of in-house administration expenses?

d. What was the cost of in-house administration expenses as a proportion of funds under management?

e. What was the total cost of any external administration expenses?

f. What was the cost of any external administration expenses as a proportion of funds under management?

g. What was the total cost of any external administration expenses to Related Parties?

h. What was the cost of any external administration expenses to Related Parties as a proportion of funds under management?

i. How many staff are employed in roles considered part of the administrative cost?

Over the last five financial years:

a. The number of rollover requests that the fund did not pay out to another fund for each year?

b. The average dollar value of a rollover for each year?

c. The value of any clawback accounts and/or funds held that is used to hold funds between financial years?

a. Does the fund maintain a reserve at least partially funded through insurance premiums, rebates from an insurance company (such as profit share arrangements) or tax benefits that have arisen from insurance?

b. The total value of that reserve?

c. The total value of tax rebates received from the ATO on insurance premiums?

In the context of building investments:

a. Have you completed assessments of the prevalence of flammable cladding across some properties?

b. Have you completed assessments of the prevalence of flammable cladding across all properties?

c. Have you taken any remediation to reduce your exposure to risk to identify flammable cladding, and if so, what?

d. Have you taken any remediation to reduce your exposure to risk to remove flammable cladding, and if so, what?

e. Do you hold any properties where insurance has been refused or are uninsured due to defective building construction such as cladding?

Governance:

a. How many trustee board members did the fund have?

b. What was the total salary of all trustee board members?

c. What was the average salary of all trustee board members?

d. Are there any performance-based assessments that determine trustee board remuneration, and if so what are they?

e. What was the salary of the trustee board chair?

f. What was the average length of service of all trustee board members?

g. What is the length of service of the longest serving trustee board member?

h. Are trustee board members asked whether they have conflicts of interest at each meeting, and if not, why not?

i. What is the conflict of interest policy for trustee board members?

j. Does your fund have a policy on gender diversity and/or balance for listed companies?

k. Does your board have gender balance?

In the context of the ACCC’s legal action and question for competition in monopoly infrastructure entities:

a. What are the implications for infrastructure investment returns if the ACCC is successful in its legal action?

b. Have you analysed your infrastructure investment portfolio to examine the risk of ACCC action to reduce anti-competitive monopoly of oligopoly pricing?

c. If so, can you provide details of the likely impact, and what is the project impact on revenue and income?

In dollar terms, for each of your superannuation products, can you please provide annual data for the past five financial years on average, for a member with a balance of $6,000, $50,000 and $150,000?

a. Investment fees

b. Administration fees

c. Indirect costs

d. Any other cost to a member which is incurred or foregone by way of a lesser return pre-unit price (but not included in the indirect cost ratio) including any other costs, charges, fees, direct or indirect benefits including any benefit by way of rebate, set-off, commission, in-kind, tax credit/offset retained, interest (or interest rebate) retained by any party involved in the management, custody, review, compliance, administration, servicing, asset consulting, valuation, operation and maintenance, financing, auditing, brokerage, execution, settlement, or otherwise of the assets in the fund, or their underlying assets.

e. An aggregate total of all fees mentioned above.

As a percentage of the value of the member account, for each of your superannuation products, can you please provide annual data for the past five financial years on average, for a member with a balance of $6,000, $50,000 and $150,000?

a. Investment fees

b. Administration fees

c. Indirect costs

d. Any other cost to a member which is incurred or foregone by way of a lesser return pre-unit price (but not included in the indirect cost ratio) including any other costs, charges, fees, direct or indirect benefits including any benefit by way of rebate, set-off, commission, in-kind, tax credit/offset retained, interest (or interest rebate) retained by any party involved in the management, custody, review, compliance, administration, servicing, asset consulting, valuation, operation and maintenance, financing, auditing, brokerage, execution, settlement, or otherwise of the assets in the fund, or their underlying assets.

e. An aggregate total of all fees mentioned above.

For the past five years:

a. What was the total cost of all advertising and/or marketing?

b. What was the total cost of all advertising and/or marketing per member?

c. What was the total cost of all advertising per new (FY19) member?

d. What was the total cost of all television advertising and/or marketing?

e. What was the total cost of all radio advertising and/or marketing?

f. What was the total cost of all print advertising and/or marketing?

g. What was the total cost of all online advertising and/or marketing?

h. How many in-house staff are employed in advertising and marketing roles?

i. How much was spent on engaging external advertising and marketing consultants?

j. Do you advertise and/or directly financial contribute to the New Daily?

Can you provide details if you have purchased the following over the past decade:

a. Google advertisements

b. Google search terms.