Industry Superannuation Funds: A New Kind of Mutual

Abstract

At the time of the founding of the industry superannuation funds, the Australian retirement-savings market was dominated by insurance mutuals. In the early 1980s, less than half the workforce was covered by occupational superannuation and unions saw the insurance mutuals, created in the nineteenth century, as part of the problem in this widespread market failure. When establishing industry-wide schemes, union leaders largely eschewed the language associated with the “old” mutuals that had become key pillars of the established financial sector. In framing their appeal to members, the trustees and managers of the industry funds appealed instead to new expressions, such as “all profit to members.” Industry funds also developed a model of 50/50 employer/employee trusteeship or “equal representation” not as an ideological prescription, but as a pragmatic way of dealing with opposition to the schemes by employers. The trustees and managers of industry superannuation funds contrasted rather than associated themselves with the “old mutuals” which, at the time, were not seen as reflecting the unions’ ideal of an industrial partnership. However, with the decline and demutualisation of the largest old insurance mutuals in the 1990s, the industry funds began to appropriate the language of mutualism. This appropriation took place within the context of a perceived need to maintain a collective identity and purpose in the changing superannuation marketplace.