Saturday 24th November 2012
HESTA – one of the principal industry super funds for nurses and midwives – has just reached a memorable milestone: 25 years in existence, managing $20 billion in funds and during the last 10 years has outperformed the average retail master trust by almost 25%.
A quarter of a century after its humble beginnings as the industry super fund for health and community workers, HESTA has grown to become a respected powerhouse in industry superannuation.
In its first year of life, 1987, HESTA was confronted with the October share market crash and a 30% fall in share prices.
Since then there have been numerous events that have contributed to market volatility – the dot-com boom and bust, the corporate collapses of HIH and Ansett, the war in Iraq, September 11, SARS, the Global Financial Crisis and swine flu among others.
But HESTA CEO Anne-Marie Corboy says that despite the market turbulence that resulted from these destabilising global events, the fund has been able to reach the benchmarks it set to grow the retirement nest eggs of its members.
“It’s important to know that investment markets go through cycles and it is our goal to provide consistent returns through these cycles. We look for returns of CPI plus 4%. Since 1987 our returns have averaged 8.4% on Core Pool against 7.2% that CPI plus 4% has been.
“They don’t get delivered every year but they have delivered over the long term which is our aim. It is important to assess super over the long term.”
Anne-Marie, who has been CEO since 1998, says she is proud of what the fund has achieved.
“I think it is a terrific achievement and a testimony to the team and the dedicated and qualified board we have at HESTA.
“A lot of our success is due to the representative-based structure of our board with both union and employer representatives who know our members well and help us cater to the needs of our members – more than 80% of whom are women.
Anne-Marie says the fund has one overriding priority. “It’s about members. Nothing is bigger than that for us. That $20 billion belongs to members and our job is to maximise the returns on those investments so our members can have good retirements.”
Anne-Marie says she is also proud of the other services that HESTA offers. “The insurance we offer compares well to others. Our long-term income disability insurance is a very good benefit for members. Our relationship with ME Bank allows us to offer a range of excellent financial products. And I’m proud of our awards program, which includes the HESTA Australian Nursing Awards and the HESTA/ACSA Aged Care Awards.”
HESTA was founded in a difficult year, when the October share market crash saw a 30% fall in share prices. Within five years the fund had built a strong base with nearly 150,000 members and $219 million in assets.
The compulsory superannuation contribution is announced to rise incrementally from 3% to 9%.
By the time it reached its 10th anniversary HESTA’s membership had swollen to 400,000 and its assets to $1.1 billion. HESTA pioneered member investment choice and collectively the industry super funds established Super Member Home Loans. HESTA introduced a Disability Income Benefit – an assistance that still sets HESTA apart. HESTA also built solid links with the community through the inauguration of the Mothers’ Day Classic in Sydney and Melbourne and the inaugural Better Health and Safety Awards in the Aged Care sector.
Industry super funds, including HESTA, launch their own bank, Members Equity. Bernie Fraser (pictured right), with his Sandman voice and impeccable financial background, becomes the face of Super in Australia. Assets mount to $3.52 billion and the membership reaches 475,000.
Eco Pool – HESTA’s sustainable investment option – is introduced. Improvements to insurance with extension of death cover to 70. Compulsory Super reaches 9%.
Assets grow to $13 billion with 595,000 members and 59,000 employers a part of the fund. Government introduces the Co-Contribution scheme – a great benefit for HESTA members. HESTA Australian Nursing awards are launched. Online statements are introduced and new retirement products arrive.
Assets climb to $19.6 billion, members to 740,000 and employers to 110,000. HESTA joins Investor Group on Climate Change. Director Beth Mohle (from the Queensland Nurses’ Union) named Australian Institute of Superannuation Trustees, Trustee of the Year. CEO Anne-Marie Corboy (pictured right) named Fund Executives Association Executive of the Year.
750,000 members, $20 billion in assets, 115,905 employers. Federal government legislates to incrementally increase super guarantee to 12%. Commissions banned on all super products. Low-income earners to have equivalent of contributions tax refunded.