This month in ACTU Super News: CFMEU Mining Division Campaign – SG For All; Super funds & Super Cadets Program; AMWU Protest to APRA; Public Sector funds; Action on the ANZ and Boral Boards plus more.
Campaign – SG For All
The CFMEU’s mining division has asked the ACTU to assist in its campaign to ensure that all workers receive the full SG.
Coal miners in NSW and Qld receive only the equivalent of 5% of their earnings because contributions are calculated on the basis of their award rate, rather than their actual earnings.
The freezing of award rates in order to make them consistent with minimum rates awards has worsened the problem.
The issue arose because of an exemption in the SG legislation which allows employers to use an inferior definition of “ordinary time earnings” if the employer was contributing on such a basis prior to the introduction of the SG in 1991, or if contributions are being made under an award or law which was operative at that time.
The CFMEU recently lost a case in the Federal Court which it ran on behalf of its members who, to add insult to injury, are required to pay the superannuation surcharge.
The union is now campaigning for the problem to be fixed, whether by a change in the federal SG Act or amendment of the state legislation governing the schemes.
Not Just Miners
The problem of the pre-1991 earnings base was highlighted in last month’s High Court decision concerning casual call centre workers.
The workers’ Qld state award provided that casuals who worked outside the ordinary span of hours (6.30am-6pm weekdays and 6.30am-12.30pm Sat.) were paid overtime rates.
The award also provided that the SG was not paid on overtime, leading the Court to conclude that super contributions were not payable on casual hours worked outside the span.
Given that the call centre operates 24 hours a day, 7 days a week, many workers are seriously disadvantaged, compared with the general position whereby casuals receive the SG on all earnings.
Other workers affected by this issue include public sector workers in Qld, and miners in Tasmania and WA.
The ACTU has written to all unions asking for information about workers who do not receive the SG on the basis of all their ordinary time earnings, including shift loadings, casual loadings and penalty rates.
In 1996 the Senate Superannuation Committee unanimously recommended that the exemption be repealed, as it was inequitable and, after 10 years of the SG, no longer relevant.
In spite of this, the Federal Government has not moved to amend the SG Act.
The ACTU expects to call a meeting of affected unions in the next few weeks in order to discuss a campaign which will bring the issue to public attention and put pressure on Peter Costello and Helen Coonan, the ministers with responsibility for the area.
Funds Take Super Cadets
11 super funds and associated organisations have agreed to participate in the Super Cadets program.
Super Cadets is designed to identify and fast track the next generation of leaders of the “all profit to members” or “not for profit” superannuation industry. Collectively, these funds have over six million members and $100 billion in assets.
Super Cadets has been developed by the Conference of Major Superannuation Funds (CMSF) to ensure that working Australians and their families continue to have access to low cost and high performing superannuation.
The funds are offering around 20 cadetships nationally. The majority of positions will be located in Melbourne.
Super Cadets is coordinated by the CMSF and supported by the AiG and the ACTU.
For more information contact
Union Protest To APRA
The AMWU has written to APRA protesting an apparent agreement reached with the Trustee of the RACV Super Fund over use of the fund’s surplus to fund retrenchment benefits.
The fund reported to members that it reached agreement with APRA that no further such payments will be made without APRA’s prior consent.
The AMWU says that this agreement ignores the payments already made, noting that the fund’s assets reduced by 15% in 2001/2.
The union has written to APRA asking why it has not sought recovery of monies paid in this way, nor pursued civil penalties against the fund’s trustee or the RACV, even though 18 months ago the trustee had been informed that it had breached SIS.
The AMWU, on behalf of fund members, has also written to the trustee asking why it has not sought recovery from the RACV of the members’ money used in this way
Super Changes For Public Service
The Government has announced significant changes to apply to new members of the PSS, the defined benefit scheme for federal public servants.
Having apparently given up on getting its choice legislation through Parliament, which also involved a convoluted choice of fund scheme to replace the PSS, the Government has decided to close the defined benefit scheme to employees commencing employment after 1 July 2005.
These employees will join an accumulation scheme as part of the PSS, with the Government contributing 15.4% of salary, which is the average cost for the current PSS arrangements.
Existing members of the PSS as at 1 July 2005 will not have any of their arrangements altered.
The Government has agreed to consult with the CPSU over the details, which do not require legislation.
The union believes that this is a significant backdown from earlier proposals, and has indicated to the Government that it is prepared to look constructively at the plan, on the basis that there is no negative impact on individual members or agency budgets.
PSS/CSS Wins Award
The PSS/CSS public sector funds, through their Investment Governance Advisory Service, have won a Royal Award for Responsible Investment, an inaugural citation developed by the United Nations Environment Program Finance Initiatives and the Royal Awards for Sustainability, which met last month in Tokyo.
“This is fantastic recognition for what we are doing. We also hope that the added status the program now has will encourage other funds to participate,” said the funds’ Corporate Governance Committee Chair, Joy Palmer.
Boral Beats Up On Shareholders
Not content with defeating all the resolutions it didn’t like, Boral has succeeded in its move to stop small shareholders seeking to influence how it’s run in the future.
Shareholders with less than 5% of the company’s capital (about $160m of shares) will not be able to propose resolutions to amend its constitution.
Currently this can be done by 100 shareholders.
Institutional investors’ support for the move has been condemned by Senator Stephen Conroy, who says that he will move an amendment to the Corporations Act to ensure that this does not set a precedent.
Although the Boral board triumphed at the meeting, the results of the various votes were interesting, with the resolutions from the TWU and Boral Ethical Shareholders dealing with health and safety receiving significant support.
The resolution seeking specific review and reporting on safety received 17.03% of the vote, while the proposal to set safety targets for senior executives received 14.83% support.
This level of voting was higher than votes on green issues (6%), executive pay (4-9%) and against options (12%).
Joy For The ANZ Board
ANZ suburban branch manager and honorary FSU official, Joy Buckland, has announced she will be standing for the ANZ Board at its December AGM.
Ms Buckland, who has worked for the bank for 27 years and last year won a landmark freedom of speech case against the bank, said: “I am standing because it is time for the bank to put people first. While the bank posts massive profits, customers and staff are being left out of the equation.”
The FSU described the move as an opportunity to bring some reality to an ANZ Board that appears increasingly out of touch with their customers and staff.
The union’s Tony Beck said “We have witnessed 17,000 fulltime jobs shed and over 500 branches closed in the last decade while profits and executive salaries have soared.
“On an industrial front we are experiencing a growing anti-union attitude from the bank with a continued refusal to collectively bargain, refusing the right of entry of officials and attempts to erode conditions of employment.”
Beck said the FSU will be supporting Joy in her campaign by providing information, including on corporate governance issues, to union members, industry fund managers and institutional and individual investors.
The FSU will be calling for proxies from ANZ shareholders to take to the AGM.
Further information about the campaign is available at www.sharepower.org.au
Blair Rolled Over Pensions
The UK Labour Party leadership was forced to back down and accept a union motion calling for compulsory employer contributions.
Delegates at the recent party conference voted overwhelmingly to approve the proposal from the GMB union, which was opposed by the work and pensions secretary, Andrew Smith.
Government and Labour party officials had been trying to avoid a vote on making contributions from employers compulsory. But after a series of behind-the-scenes meetings, the GMB general union secured agreement that its demand should be included in the motion.
In an apparent attempt to ensure that the result of the vote would not be seen as a leadership defeat, the party’s ruling national executive committee announced that it was making no recommendation on which way delegates should vote.
The motion approved by delegates included the GMB’s proposal: “This conference resolves to widen the pensions debate and calls on employers – as well as individuals and the state – to play their part in eliminating poverty in retirement via compulsory employer contributions to pension schemes.”
The motion also welcomed the government’s creation of a special commission to study the current crisis in occupational pensions and condemned companies for closing final salary schemes.
In his speech to the conference, Mr Smith said the work of the pension commission set up to look into the future of pensions would include “the case for greater compulsion”.
He told delegates: “While we applaud those employers taking tough decisions to meet their pension commitments, we condemn those who walk away from their responsibilities short changing workers who saved all their lives.
“They can’t claim workers’ loyalty and dump them in retirement.
“Labour is in government not just to challenge such injustice but to do something about it,” he said.
The law would be changed to stop employers walking away, using takeovers to scrap pension schemes and stop them changing schemes without consultation.
A protection fund would also be created to compensate workers of firms that went bust, he said.
Mr Smith also announced changes to pension rules that will allow people who defer their state pension to be paid a lump sum of up to £30,000.
Keeping The Best For Last
It is well known that industry funds, overall, regularly outperform their retail rivals.’
Less well known is that the $280m Meat Industry Employees Superannuation Fund (MIESF) outperformed most of the other industry funds, with a return of 4.5% for the last financial year, together with an average return of just under 10% and not one negative year since inception in 1981.
MIESF explains its recent success as a decision three years ago to decrease allocations to equities, particularly international shares, and to gradually increase its weighting to rental properties with a strong yield.
“Unlike many funds, MIESF is not restricted in its investments through the necessity to manage to a theoretical asset allocation to particular benchmarks, but rather is able to make sensible opportunistic decisions based on an understanding of the economic conditions and financial markets.
“This approach is essentially an absolute return approach and in recognition that it is not possible to make market timing decisions that are always going to be correct, the changes in the asset allocation will also be done on a gradual basis and based on decisions regarding individual investments.”
Editor: Linda Rubinstein
Fax: 03 96634051