Our Money in Their Hands: A book extract

Australia’s super system now holds about $4.5 trillion, or roughly 150% of the country’s gross domestic product (GDP). Yet compulsory super only began in 1992, and the system we now take for granted was far from inevitable.

Our Money in Their Hands, a new book by the late Greg Bright, tells the story of how it was built. Bright was a journalist and publisher who covered super for more than three decades, starting with his first super publication, Super Review, in the late 1980s. Along the way he mentored a long line of finance journalists.

Bright died in 2024, leaving a near-complete manuscript. Two journalists who worked closely with him, Amanda White and Lachlan Maddock, oversaw its completion.

The book follows the political battles, policy breakthroughs, industry pioneers and institutions behind the system. It runs from the first Wages Accord between the Australian Council of Trade Unions (ACTU) and the Hawke Labor government in 1983, through the introduction of the Superannuation Guarantee in 1992, to today’s multi-trillion-dollar industry.

In her preface, White describes the book as a historical reference for the coming of age of an industry. She closes with the line that gives the book its title, that super is “our money in the hands of a very big industry.”

The extract below, published with permission, is from the opening chapter, Take-off. It covers the patchwork of corporate and public sector schemes that came before modern super, the long-running debate over which fund was Australia’s first, and how the industry’s growth changed who made money from it.

Extract from Our Money in Their Hands

For more than 100 years, governments and corporations tried and retried, with varying degrees of enthusiasm, to design and manage superannuation schemes for their own workers. In the post–World War II period of growth, proposals for a universal scheme to augment the Commonwealth Age Pension, usually from academics or politicians, came and went also. Until the 1980s.

With the election of the Hawke Labor Government in 1983, which had gone to the polls with the promise of the first Wages Accord with the ACTU, came Award Super, spreading the coverage to workers in general. The landscape changed dramatically, and a whole industry was born; this was modern super. The schemes were different, their members were different and the new service providers they spawned were different. And there were a lot more of the latter.

If the story of super is a three-act play, then Act I covers the battles of ideas and power throughout the 1980s and the leadup to Act II, the introduction of the Superannuation Guarantee (SG) in 1992. The SG set off a period of rapid growth for the underpinning engine of super: the funds themselves. The new profit-to-member funds grew not only in member numbers and funds under management (FUM) but also in sophistication.¹

Then comes the drawn-out uncertainty of Act III, with skirmishes replacing full-scale battles, so far at least. This phase can be reasonably defined by the fault line caused by the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, established in December 2017. This led to the banks voluntarily divesting themselves of their advice and wealth management divisions and a general shakedown of adviser-driven distribution within the retail super sector.

Profit-to-member funds survived the Royal Commission process relatively unscathed. Nevertheless, like a disputed border between antagonistic countries, it would seem that there will never be bipartisan support for the system while trade unions have a say in the management of workers’ money.

Australia was moving, ever so gradually, towards developing a more egalitarian – modern – super system before Award Super. Indeed, several big funds that survived into the 2020s can trace their roots back to the first half of the twentieth century – a couple to even earlier – as funds for state public servants.²

With only a handful of exceptions, though, those pre-Award Super funds lacked several key elements of the modern defined contribution funds. Notwithstanding the comfort of a defined benefit pension, the many small corporate funds tended to lack portability, member equal representation – or any – and compulsion.

There were a lot of them; at least 3,000 in 1986. Many of the larger foreign companies operating in Australia had set up local schemes for management, and Australian companies followed suit to remain competitive in the market for talent. Public-sector schemes were more amenable to member representation and some portability.³

Which entity was Australia’s first super fund is disputed. AMP introduced a pension service with life insurance in the 1850s and a scheme for its own selected management in the 1880s. Australia’s oldest company, the Bank of New South Wales (now Westpac), established in 1817, is also known to have had a similar scheme for senior employees from around the middle of the nineteenth century. And what has been claimed as Australia’s oldest continuous scheme – a corporate fund for the former Colonial Sugar Refining Company, dating back to the Depression period of the 1890s – was dissolved in 2014, with management of member accounts being transferred to a global funds management firm, Russell Investments.

First industry fund

While the country’s first superannuation fund was almost certainly a corporate one, what was the first industry fund is also disputed, not helped by conflicting definitions of ‘industry’ and ‘public sector’. Most often said to be Australia’s oldest industry fund, Equip Super was a Victorian Government–sponsored fund for the State Electricity Commission. Formed in 1931 at the start of the Great Depression, it has done its best ever since to remain independent. However, in 2019 it merged its important back-office functions with a platform of another industry fund, the Victorian-based Catholic Super.

A lead contender for ‘first’ – there is more than one – is the former Stevedoring Employees Retirement Fund, which, as Maritime Super, finally merged into Hostplus in 2021. Maritime Super celebrated its fiftieth anniversary in 2017, with chair Paddy Crumlin saying that the then-voluntary pension fund was negotiated in 1967, with employers contributing 1.5 times the amount contributed by employees. At the time of its final merger, about 75 per cent of Maritime’s retirees were taking up the fund’s pension – a proportion far higher than in any other industry fund.

Another lead contender for the ‘first industry fund’ distinction, perhaps for pedants, is the former Pulp and Paper Workers Super Fund, which was formed in 1975. Now aptly called First Super, the fund’s claim is legitimate, there being no public sector involvement in the Pulp and Paper fund’s establishment and given that the fund consists of contributions across the workforce from employee wages, with no matching contributions from employers (which were common among corporate funds).

Bill Watson, the CEO of First Super since 2013, says that the trust deed for the Pulp and Paper Workers fund was drawn up by lawyer Phil Gardner, who went on to specialise in that kind of work. The deed, he says, was used as a prototype for several other funds – including LUCRF and the Victorian meat workers’ fund, MIESF.

The fund merged with the Furniture Industry Retirement Super Trust (FIRST) and the Timber Industry Super Scheme (TISS) in 2008. While, as of April 2023, First Super has only about $4 billion under management and 60,000-odd members, it continues to punch above its weight thanks to good performance and efficient industry distribution. For performance it may be helped by having a seat at the board table of the big asset consultancy Frontier Advisors. Frontier’s four shareholders are AustralianSuper, HESTA, Cbus Super and First Super.

Chris Northover was federal secretary of the Pulp and Paper Workers Federation, which was dissolved in 1991. Says Watson, he ‘had a vision for all the workers in the pulp and paper industry. When the fund was created it had a high contribution rate, up to 10 per cent. Now, you have men – and they were all men – retiring with more than $1 million because of the length of time they had in super.’

Bill Watson’s fund is also a model for a small fund’s survival by providing good and personal service to members. At $4 billion in assets and about 70,000 members as of 2025 the fund operates its own administrative system and has its own financial planners (currently four), travelling all over the country to talk with members. It participates in as many industry days as it can. ‘I love meeting members at things like the woodchopping events,’ says Watson. He was hopeful of putting on the 70,000th member in November 2025.

The TISS connection brought Michael O’Connor, its then chair, in to the merged fund. His sway enabled First Super to be offered ownership stakes when the various collaborative organisations were formed. These included Industry Super Holdings, Industry Fund Services (IFS) and its offshoots, and the former Members Equity Bank/ME Bank (sold to Bank of Queensland in 2021). O’Connor, the co-chair of First Super (alongside employer representative Mike Radda), is the national secretary of the Construction, Forestry Maritime Mining & Energy Union (CFMEU), where he has been an official since 1985.

First public sector fund

The first Australian public sector super fund is likely to have been the one set up in Victoria for sections of the state public service, in 1862. The first in New South Wales was the NSW Police Force’s scheme, in 1906, which was administered inside the force. This followed the Colonial Government’s introduction of the country’s first age pension in 1900, ahead of federation. The first Commonwealth age pension was introduced in 1909, after state land was transferred to allow the Australian Capital Territory to be established. The first Commonwealth public servants fund was what is now called the Commonwealth Superannuation Scheme, set up in 1922.

During the modern era of super, from the mid-1980s, the number of funds shrank as the total assets climbed. Bowing to the ease of using the new profit-to-member funds or even newer commercial master trusts, that first round of consolidation reflected the shift away from corporate Australia running its own defined benefit super schemes for employees.

More recently, especially in the decade leading up to the ALP’s victory at the 2022 federal election, the consolidation reflected what appeared to be a mad rush to obtain greater scale, encouraged by the former coalition government, with enthusiastic support from the financial sector regulator, the Australian Prudential Regulation Authority (APRA).

Total assets, nevertheless, have continued to rise throughout the current, post-SG phase of super, passing $4.5 trillion in 2025. In comparative terms, the figure has gone from the equivalent of 20 per cent of the country’s GDP in the 1980s to more than 150 per cent today. Notwithstanding the downturn in markets in 2021 and 2022 amid global concerns about inflation, in December 2021 the total was conservatively estimated by the global consulting firm Deloitte to continue to climb to at least $9 trillion by 2041.

Those 3,000-odd mainly corporate defined benefit schemes of 1986 were serviced by a community of actuarial firms, fund managers and life offices, as well as an array of brokers, solicitors and accountants. However, to a large extent it was then still a cottage industry.

In the mushrooming investment sector in particular, fertilised by the growth in total superannuation assets, some fortunes were made and some were lost. In an industry where the number of buyers – the ‘asset owners’ – was dwindling but the quantum of assets under their control was growing exponentially, the winners were the organisations that were remunerated on an ad valorem basis, such as fund managers. Those who charged on a time-worked basis, such as actuaries and lawyers, lost out.

Notes

1. There are four books detailing the formative period of modern super – the first two phases. They are: Diana Olsberg’s Australia’s Retirement Revolution, 1997; Christine St Anne’s A Super History, 2012; Bernard Mees and Cathy Brigden’s Workers Capital, 2017; and Mary Easson’s Keating and Kelty’s Super Legacy, also published in 2017. Olsberg’s and Easson’s books both followed earlier academic theses on the subject – Olsberg’s (née Shaw) in 1992 and Easson’s in 2014.
2. QSuper, now part of Australian Retirement Trust, was created in 1912 under the Queensland Government’s Public Service Superannuation Act. State Super (the New South Wales Government’s SAS Trustee Corporation) dates back to 1919. The New South Wales police force operated its own fund a little before that, from 1905. When State Super was closed to new members to cater for Award Super, the fund begat First State Super, which represents the core membership of today’s Aware Super. However, Victorian public servants can lay claim to being the first recognised, with a scheme launched in 1862.
3. Putting together the initial mailing list for Australian Super Review in 1986, with the help of the publicly searchable ASFA membership list (it was an unlisted public company), we were able to identify about 3,000 mainly corporate funds. However, total super assets around the time, according to Reserve Bank figures including life insurance, was only $41 billion.

This extract from Our Money in Their Hands by Greg Bright is published with permission.

Where to buy Our Money in Their Hands

Our Money in Their Hands (ISBN 978-1-76145-288-8) is available from bookshops and online retailers, including QBD Books, Kinokuniya, Petrarch’s Bookshop, Fullers Bookshop and Amazon Australia.