HI All
For those interested C Bus are in todays australian as so.
CBus tackles super threat
Tim Boreham
January 17, 2005
CONSTRUCTION industry super fund CBus is readying for the upcoming super choice regime by expanding its member base from blue-singleted blokes in hard hats to white-collar workers such as architects and engineers.
Under new chief executive Sandy Grant, CBus also plans to woo the potentially huge client base of self-employed tradesmen and sub-contractors who are not part of the net of award workers generally captured by the industry fund. "It has been a missed opportunity to date," Mr Grant said.
"It is a good defensive strategy in terms of choice, in that if you get some of the high-flyers the others will follow."
He said the upcoming introduction of super choice on July 1 should not necessarily be seen as a threat to industry funds but as an opportunity to promote their virtues to a wider audience.
While industry funds have been prescribed under collective industrial agreements and awards, from July 1 employers not party to federal awards will have to allow workers to nominate a fund of their choice for the compulsory 9 per cent contributions.
Mr Grant said most of the fund's 385,000 members – whose account balances averaged $14,000 – wanted the investment options to be as simple as possible.
"But we have 3500 members with more than $100,000 and there are a lot of people who want a more sophisticated product," he said.
"We are looking to develop our public offer with a do-it-yourself-type proposition with more flexibility and investment and insurance options."
Mr Grant said CBus also wanted to decrease member attrition by encouraging casual building workers to continue contributing even if they leave the industry.
He said CBus would continue to focus on the construction industry, rather than trying to woo workers from other industries as some other industry funds have done.
Mr Grant said the best way to counter the super choice threat was to maintain high investment returns.
The fund, which not surprisingly has a weighting to property investments, credited 14.5 per cent to members of the balanced fund last year. The balanced option has averaged a 10.1 per cent return over 20 years.
With $6.3 billion in assets under management, CBus ranks as Australia's fourth biggest industry fund.
Mr Grant said he expected more mergers along the lines of the tie-up between Australian Retirement Fund, the second-biggest industry fund and third largest player STA.
He said while CBus would talk to another fund making merger overtures, CBus had no "predatory interest".
"We are more interested in knocking off (retail funds) AMP and BT than taking over an industry fund," he said.
Smaller funds would be driven to mergers because of increased regulatory pressures, such as the need to devise a formal risk management plan and for trustees to hold a financial services licence.
Mr Grant was previously chief executive of the industry fund umbrella body, Industry Fund Services, for seven years and before that spent 31 years at Colonial (now part of the Commonwealth Bank) in a number of roles.
"I have been around super for 39 years (but) my real thrill will be setting the fund up for the next stage of growth," he said.
CBus held a "special place" because it was one of the first industry funds set up after the introduction of the compulsory super regime by the Hawke-Keating governments.
FYI I am about to contact them to look into wife being part of my company fund whilst being emplyed elsewhere? Will report back.
Peter 147
