Global top 20 pension fund assets rebound strongly

According to the latest top 300 pension funds research from the Thinking Ahead Institute, assets under management (AUM) at the world’s 300 largest pension funds increased in value by 8.0 per cent to a total of US$19.5 trillion in 2019, in contrast to the 0.4 per cent decline the year before,

The research, conducted in conjunction with Pensions & Investments, a US investment newspaper, shows that the value of the top 20 pension funds’ AUM also rose by 8.1 per cent in the same period, equating to 40.7 per cent of the total AUM in the rankings, unchanged from the previous year.

Martin Goss, director, investments for Willis Towers Watson Australia said: “The report shows while total assets globally grew by 8.1 per cent, the Australian funds in the survey grew at 19.2 per cent for the year, with funds rising an average of 13 places. This performance has been aided by relatively high allocations to growth assets and net positive cash flow, as many funds remain in a growth phase.”

The biggest Australian movers in the top 300 list were HOSTPLUS, rising 46 places and recording 40 per cent growth, AustralianSuper, which was the highest Australian fund on the list gaining 10 places and growing by 29 per cent, and Sunsuper which also recorded 29 per cent growth, rising 12 spots.

NGS Super and Australian Catholic Super announce plans to merge

The planned merger will create a $21 billion superannuation fund with approximately 200,000 members servicing independent and Catholic schools and the community sector across Australia.

Australian Catholic Super (ACS) chair David Hutton said that in the current environment, ACS wanted to consider how the interests of its members could be strengthened and better serviced within a larger like-minded education industry fund.

NGS Super’s chair Dick Shearman said the proposed merger with Australian Catholic Super had been driven by synergies between the two funds and is set to strengthen the fund’s position into the future.

The two funds will merge subject to finalisation of comprehensive due diligence and assessment of member benefits.

‘Herstory’ of Superannuation’ report says 12 per cent SG is crucial

At the end of the 2020 Women’s Super Summit Wood released ‘The Herstory of Superannuation,’ a paper from Per Capita for Women in Super, that examines the history of superannuation for Australian women.

The report tracks the transition from the experiences of the ‘silent generation’, who retired without significant independent superannuation funds, to the ‘baby boomer’ generation who have begun to experience the benefits of superannuation incomes in retirement. This comparison shows the positive impact on women’s financial security of the superannuation revolution.

The report concludes that ‘the Superannuation Guarantee in 1993 was by far the greatest policy intervention to improve retirement incomes for women.’

Women in Super chair, Cate Wood said that the increase in the Superannuation Guarantee to 12 per cent was crucial for women. “If the Government backs away from this commitment yet again they will be held to account for every woman struggling to pay rent or sleeping in a car in future decades.”

Wood also said the impacts of COVID-19 including the Government’s Early Release of Superannuation Scheme had disproportionally impacted women, widened the retirement gender gap and required specific gender analysis and recovery plans.

Cbus sets strong 2030 target in revamped Climate Road Map

Cbus Super will target an ambitious 45 per cent reduction in their absolute portfolio emissions by 2030 according to a new Climate Change Roadmap launched recently, in line with the prevailing science. Cbus Super has also locked in a commitment to achieve net zero emissions by 2050, reinforcing its commitment to the Paris Agreement.

Cbus Super CIO Kristian Fok, said: “Cbus Climate Change Roadmap represents a strong and sure determination to see our members retire securely in a safe climate.

“The average Cbus member is 39 years old. It’s our responsibility to safeguard their investments as the financial impacts and physical effects of climate change intensify.

“This science has made clear the targets and timeframes. The course that we have charted will see Cbus reduce our portfolio emissions while investing further in renewable energy and climate solutions, as well as avoiding ‘stranded assets’ as the economy transitions.”

‘Ethical’ investors must be calm in the face of bad news: study

New research from Monash University shows investors tended to overreact when companies were the subject of negative ESG news, resulting in greater share price falls and an exodus of unit sales.

Analysing more than 331,000 ESG news events between January 2000 and December 2019, the study showed investors or fund managers were better off waiting – in some cases up to 90 days – for any bad ESG news to pass before trade decisions are made.

The study by Dr Bei Cui from the Monash Centre for Financial Studies, in the Monash Business School, is believed to be the first in the world to test the extent of market reaction to ESG controversies up to 90 days after the event. Previous studies have focused on shorter time frames.

To read the full article, please visit Monash Impact.

HESTA outlines investor expectations for engaging with Indigenous communities

HESTA is calling for the mining and energy industries to adopt consistent principles for engaging with Indigenous communities, saying investors are concerned risks are appropriately managed after the destruction of the Juukan Gorge Caves.

HESTA has released a Statement on Working with Indigenous Communities detailing its investor expectations around how companies manage risks associated with Indigenous heritage protection issues and has written to 14 Australian mining and energy companies.

HESTA CEO Debby Blakey said investors were dismayed at the destruction of culturally significant sites at Juukan Gorge by Rio Tinto.

“Not only was priceless heritage destroyed and the costs borne by shareholders as a result, but we had believed this risk to be well managed in our portfolio,” she said.

“This has prompted us to renew our focus on ensuring fair and sustainable outcomes for Indigenous communities and companies.”

“What occurred with Rio is a wake-up call for all investors. It has caused us to review how we are assessing company performance in this area and how we can more effectively advocate for legislative and regulatory change,” she said.