NT Government switches to super fund with ties to Territory union
The company recently appointed by the Labor Government to manage more than half a billion dollars worth of public service superannuation has ties to an NT union, an ABC investigation has revealed.
The Government also quietly named Adelaide-based Statewide Super as the default superannuation fund for new NT public service employees on its Treasury website on December 13 — the day before it revealed it was in the throes of a financial crisis and long before the findings of the Banking Royal Commission and a Productivity Commission inquiry into the superannuation industry came down.
The deal involves Statewide becoming the default provider for new public servants as well as the manager of more than $526 million of accumulated funds from the NT Government Public Authorities Employee Superannuation (NTGPAES) Fund that serves roughly 2,500 NT Government employees.
Statewide is affiliated with the Australian Services Union, with half of its 10 directors appointed by the union and some with links to NT Labor MLAs.
Statewide will take away an estimated $4 million a year in investment fees for managing the NT Government’s employee’s fund — close to $1 million more than former manager Australian Super charged.
The deal will also mean Northern Territory public servants will be paying more to the much smaller Statewide than it did to Australian Super.
Key points:
- Statewide Super will manage more than $526 million of accumulated NT public sector superannuation
- It was previously managed by Australian Super, for about $1m less annually
- Links between some Labor politicians and new Statewide directors are being questioned
‘Propping up their union mates’
Opposition Leader Gary Higgins questioned why the Government didn’t wait for the banking royal commission and productivity commission’s findings to be known before finalising the deal.
“You’re talking about a fund of over $500 million,” he said.
“The Government should have waited for those reports to come down.
“You’re looking at $850,000 more in fees, that’s out of the pocket of the [public servants].”
A Treasury spokeswoman initially claimed that Statewide will charge the same fees as Australian Super, but product disclosure statements show Statewide will charge roughly $850,000 more in “investment fees” to manage the fund than Australian Super and will make roughly $4 million a year — on top of administration fees.
The Treasury spokeswoman said that despite the higher fees, Statewide performed better than Australian Super in four of the last five years and that the NT Government expected that to continue.
“Statewide Super members have been receiving higher investment returns than Australian Super members despite the difference in the funds’ asset-based investment fees,” she said.
However, according to Canstar rankings, Australian Super was listed as the second-best-performing fund of 2018 with Statewide not making the list.
Mr Higgins said that was concerning and accused the Gunner Government of playing favourites for its own ends with little regard for the public servants’ money.
“This super fund is being handed a hell of a lot of money,” he said.
“[Labor is] propping up their union mates and trying to build up a bit of a war chest for the next election and this is how they’re doing it.
“What worries me is the connection between some of their current MLAs and the directors of this superannuation fund.”
‘I had no role in the decision-making’
Five of Statewide’s 10 directors were appointed by the ASU, with two of those — Joseph Scales and Anne McEwen — appointed by the SA/NT branch of the ASU.
Labor MLA Chansey Paech thanked Mr Scales — who is also listed as secretary of the SA/NT ASU branch on their website — in his maiden speech to NT Parliament in 2016, referring to Mr Scales as a “supporter”.
He said yesterday that Mr Scales was a “personal friend”.
“I had no role in the decision-making on the contracts … [and] I have had no discussions with any person about the contracts,” he said.
A spokesman for Chief Minister Michael Gunner confirmed that Treasurer Nicole Manison signed off on the deal but said that nobody from Cabinet was involved in the process of selecting Statewide.
The spokesman said a selection panel consisted of the Commissioner of Superannuation and senior staff from the Commissioner for Public Employment’s office, the Department of Treasury and Finance, and the Department of Corporate and Information Services.
The NT Government would not say which other superannuation companies had bid on the contracts, only that a total of eight companies were considered for the default provider and seven firms to manage the accumulated NTPAES fund.
The Government said its contract with Australian Super was set to expire on February 9 and had put the expression of interest out mid-last year.
The only announcement it made of the new provider was a statement on the Department of Treasury’s website on December 13.
A spokeswoman for Statewide declined to answer questions about the company’s connections to Labor MLAs, sending a statement instead.
“Statewide Super is proud to have been chosen as the fund to safeguard the retirement futures of Northern Territory Government employees,” the statement said, adding that a previous incarnation of the company had operated in the NT since 1990 and pointed to its “five-star-rated Canstar” mention.
The NT Government paid $126 million into employees’ superannuation in 2017-18, according to Treasury figures.
A total for how many employees that covered was not released.