“We’ve become expert at adjusting for regulatory change,” Paul Schroder, CEO of AustralianSuper, told the National Press Club this week.
In a live televised Q&A, Schroder didn’t hold back on how funds cope with tweaks like the looming Division 296, which will see high super balances taxed at higher rates.
“We think of it [regulatory change] as a constant state,” he said, after earlier warning governments to keep their hands off super.
“We have to budget for it every year. We have experts deep in the system to make sure we do a very good job of trying to meet all of our obligations.”
He admitted the fund hasn’t spent much time “thinking about one particular change”, but stressed that AustralianSuper is global, and that adapting to rules is just the “cost of doing business”.
“It has 2,000 people on four continents in multiple time zones and so we are thinking about obligations in all of those jurisdictions at all times,” he said. “There’s always costs associated with regulatory change. It will cost a bit, it will take a bit of effort, but for us it’s kind of like the cost of doing business.”
And a business it is.
Super may be government-mandated, and industry funds like AustralianSuper member-owned – but at the end of the day, it’s a business.
This year, like many peers, the fund has been under ASIC’s microscope, which launched legal action over claims-handling delays. Earlier in the year, the fund was also among a group hit by a cyber incident.
None of that got a mention on Thursday, but Schroder’s message to government was clear: hands off.
“It would be a disaster for members if governments tried to tell us what to invest in,” he said. “Members carry the investment risk, and it is their money.”
He doubled down: super isn’t a “trillion-dollar fix-all” for national projects.
Schroder’s warning comes as debate widens beyond regulatory tweaks to whether government should go further and direct how the $4 trillion pool is invested.
While some argue that the government could have a stronger case to influence investment direction than with a typical corporate entity, experts caution that government involvement could conflict with the legal obligation of superannuation trustees to act in the best interests of their members.
Speaking to InvestorDaily, AMP’s chief economist Shane Oliver said that allowing the government to dictate where funds are invested could ultimately lead to poorer outcomes for members.
“The problem is that the rules are that superannuation funds invest in the best interest of their clients and having government direct where that investment should go would potentially conflict with that,” he said.
Historical examples, such as interventions in Argentina’s pension system, show that government decision-making is often less effective than trustee-led investment strategies.
Oliver emphasised that governments may struggle to “pick winners”, and interventions in areas like social housing or clean energy could create unintended risks.
However, the government can play a supportive role.
Oliver, like Schroder, encouraged policymakers to focus on creating attractive investment opportunities within the domestic economy, allowing super funds to allocate capital without breaching their fiduciary duties or conflicting with the annual performance test.
“You have to make that investment stack up for the super funds,” he said, highlighting that collaboration and incentive design may be more effective than direct mandates.
For both Schroder and Oliver, the path forward is clear: government can create conditions that make domestic investments compelling, but it should stop short of taking the wheel.
