Bob Henricks has challenged the industry to keep the representative model to curtail an increase in remuneration, as he retires from Energy Super after 21 years on the board.
Henricks has been a vocal critic of the move to an independent model, saying it would have no better governance, but higher salaries.
“We used to regularly get people in to do an assessment on what the board should get paid, and they’d always come up with these figures and I’d have to halve them,” Henrick said.
When Henrick was chair of the board and the investment committee he was paid $70,000 annually. He stepped down from this position in early 2014, but continued to serve as a director.
While the extra skills that independents bring in could aid and assist, the partnership forged between employer and union groups was crucial for members’ best interests, he said.
“The establishment of industry superfunds is one of my fondest memories, because it meant we found a new cooperation between employers and unions. Traditionally enemies – they were enemies – but by working together we were able to make enormous steps forward, and we realised we could live and work together as long as we had a common goal,” Henrick said.
“This is why I still favour industry funds. It might be a paternalistic approach, but it’s still an excellent approach and has members’ interests at heart.”
Henrick’s fear is that by adopting an independent model, with no equal representation, people would use superannuation as a career move.
“There’s a push for people that don’t have that concept [of members’ best interests] or don’t have that belief, that’s not going to be a good thing for superannuation if that happens.”
This view has been informed by letters he has received from people saying “I am a director of a small business, I know nothing about superannuation but I am sure I could learn, please give me a call. I would do it for a reasonable sum of money”.
While Henricks finds this sort of approach “pitiful”, he does see the value of independents adding skills to the board.
One of his last decisions as chair was to bring in Christine Maher as an independent director because of her “outstanding” skills as a superannuation lawyer. This appointment also had the additional advantage of improving the gender diversity of the board.
He added that another worrying tend was the pressure for directors to leave boards. In recent times, a number of employer representatives have also had to leave Energy Super because their term was up.
“This view that they should only serve five years is crazy. You need continuity on boards, and you need experienced people, and those people [representatives] can play that role brilliantly.”
The other major area the industry needs to focus on, according to Henricks, is the pension phase.
“We’ve got a pretty good superannuation system now in Australia – which would have been a top system if we had 15 per cent contribution – but we haven’t really got that good at pension facilities yet.”
He added members probably found it even more complex to work out the pension phase than the accumulation phase, which was why “there is still a job to be done”.
Henricks has been involved in the industry for more than 30 years, campaigning for industry funds in the early 80s and helping to launch AUST(Q) in 1985 and SPEC Super in 1987.
Last year, Henricks was named Trustee of the Year by the Australian Institute of Superannuation Trustees, recognising his significant commitment to the fund, its members, and the broader superannuation industry.
Speaking about Henricks’ departure, Energy Super chair Mark Williamson applauded Henricks for his “invaluable” contribution to the industry super sector and the fund.
“Bob is one of the forefathers of Queensland’s industry super. From his involvement in the launch of AUST(Q) and SPEC Super, through to his appointment to ESI Super and then Energy Super, Bob’s foresight and strategic experience set the framework for the growth and success the fund has today,” Williamson said.
Reflecting on his time, Henricks said he had very fond memories of people like Bill Kelty, Garry Weaven and Mavis Robertson.
“I used to stand on the back of the truck with Garry Weaven and convince the workers we needed to set up some superannuation and build up some sort of a pension.
“I was union organiser at that time and got involved in superannuation because it was quite unjust. Superannuation had vesting provisions, which meant that working people lost money they put in and didn’t get anything back unless they were in the fund for 10 years.
“Of course, that meant that the people at the top of the tree always got an extra benefit – they were sponging off the people at the bottom of the ladder. People don’t realise what it was like back then.
“I spent 30 years as a union organiser, so I saw superannuation as a continuation of looking after them. I used to look after their wages when they were working and I felt that I could make a contribution in looking after their retirement.”
Peter Duffy, who has almost four decades of administration experience in the Queensland electricity supply industry, will replace Henricks as a member representative director on the Energy Super’s board.
Popular across Investment Magazine