When a small industry super fund takes second place in the annual Your Future, Your Super performance test, everyone stops and takes notice. How can a fund with a mere 16,000 members that’s only open to meat industry workers possibly outperform giants such as Australian Retirement Trust?
The answer is by aligning itself with its core values and fearlessly implementing an innovative business model, according to Meat Industry Employees’ Superannuation Fund (MIESF) CEO Katherine Kaspar.
Since she took the helm of the organization in 2021, it has seen positive member growth and outstanding investment returns.
“In 2022, our MySuper product surpassed our annual return benchmark by 1.56 percent, ranking second of 48 in the Your Future, Your Super performance test,” Kaspar explains.
“Our returns have also placed us in the top three performing funds over one year, three years and five years when measured against other MySuper products in Australia, which is just incredible. For a fund of our size to be beating the pants off some of the big kids is something we’re incredibly proud of.”
Kaspar attributes MIESF’s success to its unwavering dedication to upholding its three core values: member-centricity, low fees and strong investment returns.
Our number one job is to make sure that our members have really solid returns as they’re heading into retirement.
“Our number one job is to make sure that our members have really solid returns as they’re heading into retirement, so their account balance can sustain them and they’re set up to enjoy life after work,” she says.
To achieve this, MIESF strives to understand its members’ needs and apply that knowledge to its engagement and investment strategies.
“Our members often face unique challenges, including low account balances, low financial literacy, language barriers, and the seasonal and physical demands of work,” Kaspar explains.
“The close-knit and personal nature of our fund allows us to build deep connections with our members and become part of their lives. We take these insights and apply them to supporting members in simple ways, helping them to be their best selves in retirement.”
Accepting the challenge
While Kaspar admits that leading a small super fund isn’t for the faint of heart, she wouldn’t have it any other way.
“Larger superannuation funds with bigger budgets can have multiple priorities, but we don’t have that luxury. I knew it would be one of the most rewarding and challenging roles when I took it on, and that really appealed to me,” she says.
After completing Harvard Business School’s Advanced Management Program during the COVID-19 pandemic, Kaspar saw an opportunity to harness the power of the ‘Explore and Exploit’ business model to grow MIESF.
“The model allows you to capitalize on the successes you already have, so I spent time with my team figuring out what we were already doing well so we could exploit that and double down on those wins,” she says.
“But the model also gave me the tools and the framework to explore what we could do a little bit differently. How could we be innovative and differentiate ourselves?”
With the expansion of the use of QR codes during the pandemic, Kaspar and her team had a lightbulb moment.
“We developed a QR code that allowed people to let their employers know they wanted to join MIESF,” she explains. “It was an industry first, and it was extremely successful.
“During a time where we couldn’t go on site and have conversations with people face to face, we found an innovative way to get people to join our fund.”
Putting members first
Kaspar also applied the Explore and Exploit model in MIESF’s investment space.
“Our members are often retiring with low account balances and using their super to pay off their home, so it’s really important that the exploit component involves continuing to deliver strong investment returns applying a predominantly conservative approach to minimize the risk that members don’t have adequate funds in retirement,” she says.
“On a smaller scale, we’ve also had the opportunity to explore other investments that larger funds haven’t been interested in which are often outside the box. Using that framework has really differentiated us in the market, and our investment returns have quite frankly been incredible.”
Beyond reaching retirement with impressive financial outcomes, Kaspar also wants MIESF’s members to understand the journey and feel confident about where they’re going.
I daresay we’re small but we’re mighty.
“We’ve built a variety of programs to accomplish this, including a very structured and compliant buddy program that allows members to seek financial guidance from their peers,” Kaspar explains.
“We also provide easy and accessible online programs, affordable and appropriate insurance cover through TAL, as well as simple fact sheets in different languages. And we do all that in a low-fee environment because we don’t want to erode our members’ account balances.
“Capitalizing on our core values in the deployment of our new framework has made MIESF a force to be reckoned with in the superannuation industry. I daresay we’re small but we’re mighty. Every day, we’re told we punch above our weight.”
Kaspar also credits her team’s bravery and willingness to take the plunge into uncharted territory for the company’s growth.
“They had a CEO before me for many years, and I came in and changed things up,” she explains. “I said, ‘I want you to trust me. We can shift the dial, we can do even more.’
“And you can see that the risks we took in the last three years have really paid off in terms of sustainability, growth, investment returns and member focus.
“Throughout the pandemic, when a number of meat works were closed down, we were seeing a decline of approximately nine percent. Our total account growth was probably one of the lowest in the industry.
“But in the last two quarters, we’ve started to see positive member growth, which is very rare in the industry.”
I’m really proud of my team for taking that leap of faith and wanting more for their members, and being able to deliver on that.
For that to happen so quickly demonstrates that MIESF’s organic growth model is working.
“I’m really proud of my team for taking that leap of faith and wanting more for their members, and being able to deliver on that,” she says.
“When I go to a restaurant, I get joy from seeing an elderly couple enjoying a meal with their grandchild and I think about how it’s good retirement outcomes like those provided by MIESF that allow people to do that.”