State Super fund members expect their superannuation fund to make socially responsibly investment choices without sacrificing retirement incomes, a new research white paper has found.
The white paper, which was based on member advisory forums across New South Wales, points to the balancing act that superannuation funds need to perform to meet the needs of members.
Members at the forums flagged several characteristics of responsible investment, including considering the impacts on people, society and the environment.
Responsible investment considerations cited by members included:
- Environmental sustainability, such as climate change, renewables and balancing the needs of future generations.
- Improved social outcomes, such as aged care, affordable and social housing, and childcare.
- Support for Australian industries, such as local start-ups, to futureproof the Australian economy.
- Good corporate practices, such as avoiding modern slavery in any part of the supply chain.
But fund members said responsible investment should not come at the cost of generating good returns and ensuring investment decisions support the best outcomes for retirees.
As one member told us, “Responsible investment, to me, is anything that sustains the planet – like solar energy, or reduced emissions. But you need to balance that with earnings – you need to be able to generate returns for us members.”
Fortunately there is evidence that funds do not need to choose between responsible investment and good returns. Academic research has shown that companies that engage in good sustainability practices typically outperform the financial performance of their peers.
One research team found “that firms with good ratings on material sustainability issues significantly outperform firms with poor ratings on these issues”, while another research team found “high sustainability companies significantly outperform their counterparts over the long term, both in terms of stock market and accounting performance”.
The views of members came from member advisory forums conducted by State Super. The forums, led by management consultancy Nous Group, heard the views of 110 members across New South Wales.
Key insights from the forums include:
- Members value a defined benefit pension as part of public sector employment.
- Members value choice in fund payout upon retirement (lump sum or pension payment).
- Members support responsible investment alongside good returns.
- Members encourage people to consider superannuation early in their career.
- Members believe it is important for people to keep busy in retirement.
John Livanas, the CEO of State Super, said the findings would help inform the fund’s investment strategy.
“We hear the message loud and clear from our members: they want us to undertake responsible investment without sacrificing retirement incomes,” Mr Livanas said.
“This is a valuable insight for our fund and for all superannuation funds. As national debate continues over defining the objective of super, it is vital that the views of members are heard.
“In our forums, members reflected deeply on how important superannuation generally, and their defined benefit pension specifically, was to their peace of mind in or when considering retirement.
“While some other consistent themes emerged, the forums also highlighted the diversity of needs, circumstances and personal preferences of our members. The importance of the provision of quality information and the need for ongoing engagement were reiterated time and again.
“We thank our members for their robust engagement and for their frank feedback.”
More information on the findings from the member advisory forum are available in the white paper, Member Perspectives
For more information, please contact:
Nada Siratkov, Chief Experience Officer (CXO)
Email: statesupermedia@statesuper.nsw.gov.au
State Super (SAS Trustee Corporation) ABN: 29 239 066 746 manages superannuation and pension schemes for past and present NSW government and public sector employees. There are over 90,000 members in the schemes (known as the Pooled Fund) which have assets totalling $38 Billion AUD as at 30 June 2022. State Super is located at 83 Clarence Street, Sydney, NSW, 2000. https://www.statesuper.nsw.gov.au/