The Emergency Services and State Super, a major superannuation fund with about 150,000 members, has spent nearly $1 million employing more than 20 consultants to review its management and business strategies, according to its annual report.
The fund, which has more than $16.8 billion under management, launched the reviews after chief executive Michael Dundon retired after just two years and was replaced by chief financial officer Mark Puli, until a full-time replacement can be found. Three of its 12 board members are also retiring in December.
Michelle Boucher, the fund’s general manager, said the review was “part of the business plan” but declined to provide details about why so many consultants were necessary, or how long they would be retained.
“They were hired for a variety of reasons,” Boucher said. According to a statement from the fund, the consultants were employed to assist with staff learning and development, in addition to strategic business plans.
More than $220,000 was spent on Emmanate, a Melbourne-based consultancy that, according to its advertising, offers leadership and team development, “corporate transformation” and executive coaching. Another $100,000 was spent on four management consultancies, including Inglis Consulting, a specialist in human resources.
Three consultancies, Right Lane, Condico Consulting and PFM Consulting, were paid nearly $290,000 developing business strategies. More than $100,000 was spent on research about the superannuation industry and membership.
Australians have more than $1.3 trillion invested in superannuation schemes with mandated contributions from their wages and salaries expected to double the total before the end of the decade.
But volatile global sharemarkets and major regulatory reforms proposed by the federal government are posing big challenges to the sector, forcing many funds to review their structure and strategies.
Fiona Reynolds, chief executive of the Australian Institute of Superannuation Trustees, a not-for-profit industry group representing trustees, said the number and range of consultants could be justified by the departure of the chief executive and need for new strategies. But most funds typically employ a handful of consultants to monitor and advise on their investment performance, according to industry experts.
ESS Super’s net returns during the past 12 months was about 11%, or about three percentage points higher than the balanced fund benchmark, according to the annual report.
ESS Super is one of the nation’s largest super funds whose membership includes police, fire, ambulance officers and teachers.
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