As one of the largest super funds in Australia, State Super is shaping and leading the industry as dramatic changes sweep across the superannuation sector. John Livanas, CEO of State Super, says he and his team are already addressing the future challenges and complexities facing the industry.
"We manage the investments and accounts of nearly 120,000 retiring and retired public service members. It may not sound like a big deal, but if you consider that we manage more than $40 billion worth of assets and that our wholly owned subsidiary, State Super Financial Services (SSFS), manages another $14 billion, you quickly realise that with a collective $54 billion under management, we're one of the largest super funds in Australia and one of the top 100 funds in the world."
"Its a fairly significant organisation, and the challenge for us was how we manage this. How do you manage the welfare of the members on one hand while also assisting the New South Wales Government in meeting its obligations from a liabilities perspective?"
"Furthermore, we are in a stage of very significant outflow. From our funds of $40 billion, we pay out around $5 billion a year while only receiving contributions of about $2 billion. This means, in order to maintain our capital, we have to make up the difference through investment returns. Of course, if we fail to achieve the investment returns required to maintain our capital base, then we will nevertheless have a smaller capital base on which to earn the same dollar amount of returns in the future. This makes us extremely sensitive to market movements, and in effect makes us a long-term investor who is investing over short-term increments."