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The death of the single-industry superannuation fund

Gerard Noonan (left, below) and Graeme Russell, colleagues who became good friends, were a great pairing at Media Super. They had the sort of relationship, as Chair and Chief Executive, that organisations crave.

They agreed on most things to do with the fund, which survived and thrived during their tenure together, except for one major thing – whether or not the fund should merge with a bigger fund.

To merge or not to merge?

In Noonan’s view, APRA had shifted its stance from being neutral on mergers to one of actively promoting them. In some cases, aided by the introduction of the Your Future Your Super legislation, APRA has engaged in coercion to rid the industry of what it determines a ‘dud’ fund.

Source: APRA 2021 Year in Review

But more importantly in his eyes, Noonan had increasingly come to the realisation that notwithstanding Media Super’s solid and continued above-average performance, there was a small coterie of very big funds which consistently outperformed by up to 1% per year. Noonan has said:

“Graeme took the view that we could still outperform, whereas I had shifted in my view.”

While he did not win that now-unwinnable argument, Russell was at least able to demonstrate how a small fund could outperform. After former CIO Jon Glass left Media Super in March 2014 and until Michael McQueen joined in January 2020, Russell was both Chief Executive and CIO. The fund did, in that time, jump a few notches up the ladder, joining the top-quintile ranks in some metrics for several periods.

Industry and fund knowledge

Russell trained as an accountant and had a career in management and business consulting prior to becoming the Chief Executive of a super fund, the timber industry’s First Super, before taking that role at Media Super in 2013.

While not a classically trained investment professional, Russell knew Media Super and its members perhaps better than anyone except Noonan. He had been a trustee director of the fund for two years before becoming Chief Executive and a trustee of its predecessor fund, JUST Super, for 19 years. Noonan, a renowned journalist who exits along with the rest of the board in April 2022 with consummation of the merger with Cbus, has notched up 30 years as trustee, starting with JUST, with 12 of those as Chair. Susan Heaney, who runs a large printing company, became Chair in October 2020.

Russell was quoted as saying on his retirement:

"I think it's disappointing that government and the regulators don't understand the important contribution that industry-specific super funds make to their industries, beyond superannuation.”

He said, as the first wave of Covid-19 was biting hard in June that year:

"We're about to see that clearly, as funds like Media Super step up to support members and companies struggling through the current economic dislocation and job losses."

It's not only in times of crisis that the single-industry fund - what was commonly termed a ‘craft fund’ - can provide additional comfort to its members. The better access to management and their understanding of the members’ interests, affords members greater peace of mind.

Noonan understands the benefits that a craft fund offers, as well he should. He often tells the story of when he was The Sydney Morning Herald’s Education Editor sitting in the big open-plan newsroom while a trustee for the craft fund was there with a small queue of people wanting to ask him about their super.

“When you work in an office with perhaps 400-500 people, you are bumping into them all day every day. I had to keep reminding myself that I was actually employed there as a journo. They liked the access. They liked the idea that it was a ‘mutual’. Bigger funds couldn’t do that.”

Noonan, a Walkley Award winner who became the Editor of The Australian Financial Review for five years, best tells the story of his demise there at the hands of the company’s then part-owner Conrad Black in an article for the SMH first published in 2007.

He was able to wear his dismissal as a badge of honour, probably impressing his former colleagues and other media people more than winning that Walkley.

Number of large funds heading for single digits

Despite the hesitations about a merger with a much bigger fund, as many other industry funds will continue to do until the number of funds probably gets close to single digits, both Noonan and Russell had a lot of personal experience with mergers.

On 1 July 2008, for instance, Russell was a Trustee Director of JUST Super, which was in the process of merging with Print Super, as well as a trustee of what was then the timber industry fund TISS, which became FIRST. On that day, he says, he was involved in two concurrent mergers with five funds wrapped up in the transactions.

Noonan’s experience pre-dates even that. JUST’s first merger, in 1992, was with the fund representing actors and entertainers, JEST, which was prompted more by a merger of trade unions supporting the two funds than the separate cohorts of members.

The possibility of a merger between JUST and Print Super was mooted fairly early in the piece, but discussions did not become serious for more than a decade later, and even then took several years to consummate.

Both JUST and Print Super were formed in 1987, in the first rush of industry funds that followed the introduction of the 3% Award Super deal between the ACTU and the Hawke Government in 1986.

In a sense, a whole new industry grew up from that period, including the retail and institutional investment trade press with the launch of Money Management and Super Review titles also in 1987.

When they came together in 2008, with Noonan as the new Chair, JUST and Print Super had just over $3 billion under management. As they exit into Cbus, they have $7 billion (as of June last year), expanding the Cbus assets to about $72 billion.

The end of Media Super

Media Super held its third and final members’ annual meeting on 24 February 2022. It was a virtual meeting so it was impossible to tell whether any tears were shed among the 300-odd participants.

Most of the more-than 50 questions directed at the eight trustees plus executives present, were to do with personal financial matters and the logistics of the merger. Susan Heaney and Chief Executive Tony Griffin stressed the benefits which would start to be seen from 26 April which is the scheduled date for Cbus services to kick in.

Mergers are complicated. At a technical level, Media Super’s 74,000 members will be given new account numbers as they are transferred to Cbus’s admin platform (from Mercer to Link). More complicated than that has been Cbus’s investment structure changes to accommodate Media Super’s unit pricing system with the bigger fund’s crediting rates system.

Heaney said that size would deliver more benefits to members. There would be a greater range of investment options; it would be easier to diversify investments and increase returns. Fees and charges could be lower.

Later this year, the handful of members who had chosen Media’s infrastructure option, which was closed in 2020 because it had become uneconomical to administer, would be able to access Cbus’s new unlisted version, as well as an unlisted property option.

She said that the Media Super ‘brand’ would also be retained, which is becoming common practice in such mergers. Maritime Super, another of the few remaining craft funds, will retain its brand when it undertakes a full merger with HostPlus next year. It is unclear what this means in practice and how long it will last.

More importantly for Media Super, especially those members who like the notion of being part of a group of like-minded people, Cbus has undertaken to form a Media Super advisory committee to its own board. This is expected to consist of some former Media trustees alongside Cbus representatives.

When Media was canvassing the field to ascertain which big fund it should pursue as a merger partner, it appointed the former Rice Warner actuarial advisory firm (now a part of Deloitte) to assist. The decision was thought to be very close, with Cbus pipping AustralianSuper at the post and with the proposed advisory committee allegedly an important factor in the decision.


Greg Bright is a freelance journalist and publisher specialising in funds management and superannuation. He is a co-founder of Super Review, now published by FE fundinfo. He was a contributing employer to both JUST and Print Super since 1987.


March 03, 2022

too many super funds seemed to have invested in russia and china without members knowing that there money is been used in child labour etc.

SMSF Trustee
March 04, 2022

mal - evidence please? What data do you have from super funds to support this rather blanket statement.

Also, please strip out those super funds who are doing what their members want them to do, which is to invest in index funds to keep fees down. You get what you pay for, mate. A choice to index is a choice to let market listings dictate what you've invested in, rather than active management.

The funds that I deal with all have absolutely minimal if any exposure to Russian or Chinese government investments. What Russian investments they do have are in listed companies, including those listed on the London stock exchange, and which have been looked into for their ESG characteristics. Not always well, but you get my point.

You can't just walk into a room and throw accusations like that around without justifying it with evidence rather than emotion.

March 03, 2022

As someone who worked as a superannuation consultant (the one whom you ring for any superannuation query) I can tell from my experience that the thought process of having fewer super funds was actually good. There were just too many small funds who were really struggling to give good returns. They might have great customer service model but at the end of the day returns are more important than customer service as even minor fluctuation can impact balance and hence retirement income. (ask an average retiree difference between an income of $50 a week)
My view is that we shouldn't end up like banks with just 4 or 5 major funds. A dozen of them would serve us all well

Ode to the Small Competitor
March 03, 2022

APRA is consistent, it did the same to credit unions. Big is better. All were forced to become a bank. My view is APRA would like One Super Fund for Australia and that would be so easy to regulate. There is no understanding of the benefit of competition to make things better. Examples of lack of competition leading to lessor outcomes abound in the history of business and governement alike. Will One Big Fund get community engagement that APRA and ASIC seem to want? No, large institutions rarely create community engagement. I can find a cheaper fees alternative to Australian Super but that is big ... 

Former CEO of a small financial institution
March 03, 2022

Ode, I think you've misunderstood. APRA didn't force anyone to become a bank. They all became "Authorised Depository Institutions" if they signed up to being eligible for the government guarantee for depositors after the GFC. Many chose to call themselves banks, but not all.
But the end result is we have a lot of competition in that space. Contrary to your point about APRA not valuing competition, in levelling the playing field they created more competition in banking.

March 03, 2022

Regardless of how much the Liberals hate the industry funds, this merger business is creating some massive allocators with ability to control capital and direct company behaviour. As Greg says, the single industry funds are going. Now the new Australian Retirement Trust with its $230 billion and 2 million members is gobbling up Aussie Post Super Scheme ($8 billion and 30,000 members).

March 03, 2022

Also bitterly disappointing for Media Super’s ethical investors - Cbus has no ethical investment options! Investors have been told that they will be moved to a Cbus fund which has top holdings of fossil fuels (including Whitehaven Coal!), gambling, alcohol, etc – basically everything that they had wanted to screen out.

David M
March 03, 2022

Too much focus is made on the benefits of scale & no thought seems to be made on what is lost. Great article highlighting some of what is lost. Anyone rang AustralianSuper recently? 2 weeks for research, 90 minute wait times, no doubt as they stuggle with their growth.

March 03, 2022

Thanks for this important record, Greg, as many of these specialist funds are lost. I'm far from convinced bigger is better, and it was good that you highlighted to personal and direct relationship of these small funds.


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