About: CSIRO-Monash Superannuation Research Cluster

THE AUSTRALIAN SUPERANNUATION INDUSTRY HAS THE FOURTH LARGEST POOL OF FUNDS IN THE WORLD, WITH OVER $2.0 TRILLION IN ASSETS UNDER MANAGEMENT AND TOTAL SUPERANNUATION SAVINGS NOW EXCEEDING DOMESTIC GDP.

While this augurs well for the future of the Australian retirement system, it raises a number of critical issues for industry participants, policy makers and fund members, both in terms of the allocation of super assets, and its impact on the economy and post-retirement income streams.

Potentially, the allocation of this significant pool of super assets provides opportunities to: drive economic growth and employment; and reshape the economy through funding vital infrastructure, supporting innovation and contributing to the development of a corporate bond market. However, much of the focus to date in the Australian superannuation industry has been on asset allocation and the accumulation phase, rather than on the post-retirement phase and Australians over 60. To maximise the potential benefit of the system for retirees, it is also important to ensure less volatile income streams closer to retirement, and appropriate financial literacy and advice.

After exploring these issues with academics and industry participants, both domestically and internationally, CSIRO and Monash University identified a research agenda to help solve some of the issues emerging from this rapidly developing industry. The CSIRO-Monash Superannuation Research Cluster Program commenced in 2013 as a multi-disciplinary international undertaking supported by funding under the CSIRO Flagship Collaborative  Cluster  Funding Program.

In addition to its own researchers, Monash University as lead research partner has brought together academic teams from Griffith University, the University of Western Australia and the University of Warwick in the UK. These research teams together with researchers from CSIRO meet on a regular basis with a range of private and public stakeholders to explore and seek feedback on the research agenda. The Cluster Leader chairs the Cluster Management Committee, and reports on an ongoing basis to the CSIRO Flagship Director regarding the conduct and outcomes of the research. The project is supported by the Australian Centre for Financial Studies in dissemination and events.

About

THE CSIRO-MONASH SUPERANNUATION RESEARCH CLUSTER IS A COLLABORATION BETWEEN AUSTRALIA’S CSIRO AND FOUR UNIVERSITIES: MONASH UNIVERSITY; UNIVERSITY OF WESTERN AUSTRALIA; GRIFFITH UNIVERSITY; AND THE UNIVERSITY OF WARWICK IN THE UNITED KINGDOM.

Aimed at addressing the two key themes of ‘Superannuation and the economy’, and ‘Australians over 60’, the $9m Superannuation Research Cluster Program has been built around a $3m Flagship Cluster Fund grant from CSIRO, and $3m in in-kind research contributions from the university partners led by Monash University. A further $3m in funding has been provided by leading industry stakeholders and research partners ANZ, BT, Cbus, Colonial First State, Challenger, Mercer, AMP Capital and Vanguard Investments.

Other key stakeholders and supporters of the program have been major industry bodies and government departments: Australian Bureau of Statistics (ABS); Australian Institute of Superannuation Trustees (AIST); Association of Superannuation Funds of Australia (ASFA); Australian Taxation Office (ATO); Federal Treasury; Financial Services Council (FSC); Productive Ageing Centre, National Seniors Australia; Productivity Commission; and Professor Hazel Bateman of UNSW.

The academic research program has been developed for Monash University and led by Deborah Ralston, a Professor of Finance at Monash University and former Executive Director of the Australian Centre for Financial Studies.

Over the past three years, the CSIRO-Monash Superannuation Research Cluster Program has generated a large body of research that will potentially deliver significant long-term benefits to  retirees, the superannuation industry, policy makers and the Australian economy as a whole.

This high-impact research provides an independent evidence base to inform policy and promote innovation within the superannuation system, which is likely to have a major influence on economic activity and the lives of most Australians in the years ahead.

A distinctive feature of the Cluster has been its focus on combining the knowledge and expertise of key stakeholders within industry and regulatory bodies with that of outstanding researchers working as part of a multidisciplinary, international team that has access to critical industry and regulatory data previously unavailable to researchers.

The research program has been specifically designed to maximise the impact of outcomes, particularly retirement outcomes from the perspective of fund members and retirees. In order to achieve this, it has been critical to foster industry consultation, to embed researchers with industry participants, and to develop knowledge transfer and dissemination programs, structured in parallel with the research program.

GOVERNANCE

The Cluster has engaged on an ongoing basis with a stakeholder group including supporters, government agencies and industry peak bodies who have assisted in providing data, guidance and feedback to researchers, and in disseminating outcomes. The governance structure of the Cluster has ensured that the research agenda is well informed and that researchers have access to expertise, insights and data, where possible, from the stakeholders, policy makers and industry representative bodies. These parties form a Stakeholder Advisory Group.

This Group informs the research program and it: meets quarterly; advises the Cluster Management Board on the research program; monitors and reviews progress of research programs; advises on funding, deliverables and impact of research activities; and provides input on the need to add/modify or cease activities in the light of progress and/or research outcomes.

To drive real, beneficial change within the industry, each investor is required to: make senior staff available to serve as members and sit on the board; have senior, technically capable staff attend meetings and workshops; discuss and review results; provide data and other assistance to researchers as necessary; and provide office accommodation for embedded researchers where required. As the following figure demonstrates, the creation of high-impact research is an iterative process, requiring ongoing communication and dissemination across all stakeholders.

TRANSLATING KNOWLEDGE TO PRACTICAL APPLICATION FOR STAKEHOLDERS

This iterative process of knowledge generation and translation to practical outcomes begins with understanding stakeholder needs. Regular meetings and an annual conference of researchers and stakeholders and researchers are held to share information and seek feedback on the research.

SCOPE OF THE RESEARCH PROGRAM

This ambitious research program utilises methodologies such as macroeconomic modelling, stochastic simulation and behavioural finance.

Priority has also been given to accessing databases including: APRA statistics; confidential de-identified data from sources such as the Department of Human Services, the ATO, the Financial Services Council, Mercer, super funds and other regulatory and industry bodies.

The organisational model for the Superannuation Research Cluster has worked well under Deborah Ralston’s leadership. It shows how a cluster can work to bring expertise together and create a wide body of impactful research. The challenge ahead is for industry participants and academics to continue to work together and for government and industry to harness the insights gained from this significant research program.

AS WE WORK TOWARDS COMPLETION OF THIS PROJECT WE CAN LOOK BACK ON THREE VERY PRODUCTIVE YEARS.

In all we will have completed around 45 working papers. We have also held more than 20 meetings and events, bringing together researchers, industry participants and policy makers to address a range of complex issues relating superannuation, and this engagement process has been integral  to  the  development  of the Cluster’s research.

As you review the outcomes of the Cluster you will note that in addition to these working papers there are also many peer-reviewed publications, simulation models and presentations that have contributed to the overall outcomes.

We have been very fortunate to have the direction of a number of eminent researcher leaders from four universities and CSIRO, who have led over 30 researchers to produce some important findings for industry, policy makers and other researchers.

The 30+ working papers available on this site represent the work to date at the time of writing. Additional work from a number of Cluster Projects has yet to be completed and will continue through to the end of the project in early 2017. This content will be uploaded as it is finalised.

In addition, the Cluster has benefited from the work of two post- doctoral staff members, Jun Feng and Sonja Kassenboehmer, who were appointed full-time to the project and will now move into other academic roles.

This has been an unusual research project in many ways. The collaboration between researchers from the four partner universities, CSIRO, industry stakeholders and policy makers has led to relationships developing around common areas of interest which will extend beyond the completion of this project in March  2017.

Professor Deborah Ralston,

Cluster Leader
DR

 

 

 

 

 

For more details about the project’s impacts and outcomes, download the Superannuation Cluster Review: 2013-2017


I would be remiss if I did not acknowledge the excellent contribution of (the late) Dr Maria Strydom to the work of the Cluster. Maria was a very active contributor to Cluster Project 3, which examines member behaviour. With her enthusiasm, good nature and research skills developed through a PhD in finance and studies in psychology, Maria was a highly valued member of the team. Very tragically Maria was killed in May 2016 while descending Mt Everest.

THE CLUSTER WOULD LIKE TO ACKNOWLEDGE THE SUPPORT OF ITS MANY STAKEHOLDERS AND RESEARCH PARTNERS, WITHOUT WHICH THIS PROGRAM WOULD NOT HAVE BEEN POSSIBLE.

We believe that the potential benefits to stakeholders from this research significantly outweigh their initial investment.

Industry leading stakeholders and research partners:

supporters

 

Supporters from major industry bodies and government departments:

>     Australian Bureau of Statistics (ABS)

>     Australian Institute of Superannuation Trustees (AIST)

>     Association of Superannuation Funds of Australia (ASFA)

>     Australian Taxation Office (ATO)

>     Federal Treasury

>     Financial Services Council (FSC)

>     Productive Ageing Centre, National Seniors Australia

>     Productivity Commission.

Professor Hazel Bateman of UNSW also provides advice to the Cluster.

The following table lists the representatives of all of the stakeholders who have participated in the Stakeholder Advisory Group over the past three years.

ORGANISATION NAME
Australian Bureau of Statistics Dean Adams, Heather Burgess, Caroline Daley, Philip Elliott
Australian Centre for Financial Studies Amy Auster, Richard Dillon, Jeremy Duffield, Eliana Maddock, Rodney Maddock, Joyce Teo
Australian Institute of Superannuation Trustees Janet de Silva, Tom Garcia, David Haynes, Richard Webb
AMP Capital Jeff Brunton, Craig Keary, Jeff Rogers
ANZ Wealth Patrick Clarke, Laura Hildebrand, Steve Sheppard, Milena Shtifelman, Will Ranken, Kerry Vogel
Association of Superannuation Funds of Australia Ross Clare
Australian Tax Office Nathan Burgess, Matthew Bambrick, Stuart Forsyth, Kasey MacFarlane
BT Financial Group Melinda Howes, Richard Jamieson, Natalia Jarvis
Cbus Peter Keogh, Rod Masson, Stephen Spiller
Challenger Jeremy Cooper, David Cox, Aaron Minney, Samantha Timms
Colonial First State Matthew Gardiner, Brian Long, Nicolette Rubinsztein, Alistair See
CSIRO Alan Dormer, Simon Dunstall, Claire Mason, Andrew Reeson, Zili Zhu
ESSSuper Shane Pearce
Financial Services Council Blake Briggs
Medibank Private Mario DeLosa
Mercer David Knox
MLC Andrew Barnett
National Seniors Timothy Adair, Philip Taylor
Productivity  Commission Karen Chester, Philip Harslett, Angela MacRae
SMSF Professionals Andrea Slattery
Suncorp Amanda Crews, Cathy Duncan
Treasury Rachael Blackwood, Rob Donelly, Brant Pridmore, Penny Sirault
University of NSW Hazel Bateman
Vanguard Robin Bowerman