Maritime Super was the first industry super fund established in Australia and has just celebrated its 50th birthday. In 1967, waterside workers, after a long battle with their employers, established a pension scheme funded by employers and workers that saw employers contribute 1.5 times the employee’s contribution rate. Seafarers started their own pension fund in 1973.
In the 1970s, just over a third of the workforce had some form of super. In the 1980s, the Australian Industrial Relations Commission decided that workers covered by some awards should be provided with 3 per cent super, but not all workers were eligible. It was not until 1992, 25 years after the establishment of Maritime Super, that the Superannuation Guarantee (SG) was introduced, making super a compulsory entitlement for all Australians.
There is no doubt that superannuation has resulted in dignity, peace of mind and security in retirement for generations of working Australians. There is also no doubt that the WWF and SUA blazed the trail for future generations of workers across all sectors.To celebrate this momentous achievement, the MUA commissioned renowned historian Diane Kirkby to compile a short history of Maritime Super:
ON TURNING 50: A SUPER HISTORY
By Diane Kirkby
This month, Maritime Super is marking its fiftieth year. Turning 50 is a significant milestone in anyone’s language. Undoubtedly, Maritime Super has good cause for celebration.The fund has proved to be an enduring model of how an industry can provide for its workers. Indeed, Maritime Super has exceeded expectations, outperforming other funds and growing in value.
The statistics tell the story. Members today retire with more in super, on average $480,000, than the industry average. Maritime Super has $5.2 billion in assets for 28,000 members. In the past ten years the fund has paid around $2.5 billion in benefits, the vast majority of those as pensions, giving members assurance of economic security for the remainder of their lives. Over 5,000 members currently have a pension.
This success has been welcomed by industry veterans who remember how it was. They rank superannuation among the greatest union achievements on the waterfront. Before the 1960s, there was no formal super system for workers. Superannuation was the preserve of management, available to professional but not to manual workers, to men but not to women. Today men are still the majority of Maritime Super members but 15% are women. Five decades of development and growth, providing benefits and services to members to fund their retirement, has given maritime industry workers an economic comfort and security that previous generations only dreamt of. Fifty years ago they retired with only their last pay check to keep them going. They and their families, if they had them, managed as best they could.
Without funds for retirement, older workers had to keep working or rely on a government pension that often meant living below the poverty line. Working was possible on old-style ships when manning levels were large enough. Crews could carry men no longer able to keep up with the hard physical work by giving them the easier jobs of ‘the peggy’, working in the mess room, washing dishes, sweeping alleyways and keeping bathrooms tidy. With the reduced manning on ships, the job of peggy disappeared and there was no longer work for older or disabled seafarers. A similar story is told of workers on the wharves. There men worked into their 80s if they could get the physically less demanding job of working on trucks but even that was tough. As technology replaced people, and the numbers labouring on the wharf declined, men who had been in the industry for decades had no prospect of work into the future.
That wharfies and seafarers should have provision so they could retire, and live with dignity,as a human right, was strongly opposed by the employers, employer associations, and often also governments. It took thirty years of campaigning from the unions, political actions from members, and the dedication and tactical skills of union leaders to overcome that powerful opposition. Only the changing circumstances of the 1960s, a different approach from management, and a federal government decision to enable but not to intervene in negotiations, brought change. Finally, the industry experts, employers and unions, could settle on the right scheme.
They reached agreement for a system of contributions from both employers and workers, a pension to be funded by employers contributing on a 60/40 ratio to the employee’s contribution rate. Those retiring at 65, were to get $50.50 per year for every year of service since 1942. In 1986 the Hawke Labor government’s Prices and Incomes Accord made employer contributions a universal 3%. At that time maritime industry members gained an additional 3%.
‘A long history’
The history of retirement funds for maritime workers begins in the late 1930s. Several unions were pushing for pensions when in 1938 the SUA under national secretary Bill Daley, first raised the matter for seafarers. ‘Big’ Jim Healy had recently been elected Secretary of the WWF and he took up the issue of pensions for waterside workers at the WWF Triennial conference in 1943. The Labor Prime Minister John Curtin gave his support in principle when a WWF deputation called on him in 1944, but the Stevedoring Commission was opposed. Employers said no. Curtin’s successor as Prime Minister, Ben Chifley, was prepared to consider the matter but not the funding model proposed.
It was to be decades before the WWF shifted its attitude on the funding model – a non-contributory scheme - advocated by Jim Healy. In that time both the SUA and the WWF had to battle against the resistance coming from the Commonwealth Steamship Owners Association, and the Liberal-Coalition government of Robert Menzies. In the ideological divisions of the Cold War, the Menzies government treated left-wing unions as a threat to national security and joined with employers in opposing their industrial demands. Pensions and annual leave were centre stage of those demands when the WWF in 1951 instigated a series of rolling strikes. As part of that campaign the WWF film unit in 1953 documented the importance of pensions to veterans in the industry. That year the ACTU started a scheme for its officials and showed how self-funding could work.
Changes in management strategy in the early 1960s, and finally a shift in union attitude towards having a contributory scheme, brought a breakthrough. In 1963 the Federated Ironworkers union brokered an agreement with BHP for payments to be paid to their retiring members, a lump sum based on their length of service. Two years later they had agreement to a contributory scheme, and finally superannuation for manual workers was a reality. A milestone had been passed.
Meanwhile a resurgence of activism by the WWF in its now long-running campaign brought new sanctions against the union. The union was threatened with deregistration by the Menzies government at the same time as the industry faced significant technological change from containerisation. In 1965 union officials were placed under enormous pressure to participate in the government’s National Stevedoring Industry Conference (NSIC). British shipping interests had committed to bringing in containerisation on the Australian route and were seeking a smooth transition. Charlie Fitzgibbon had been elected WWF National Secretary following Healy’s death in 1961. Fitzgibbon had been to the west coast US to see how the International Longshore and Warehouse Union (ILWU) under the leadership of the legendary Harry Bridges had dealt with containerisation, and Bridges now attended the Australian conference.
‘For 23 years we have been patient,’ the Maritime Worker claimed in March 1965, waiting for pensions in ‘a story of procrastination and vacillation’ by government and employers. Two years later in a special issue the Maritime Worker published the complete report of the NSIC (also known as the Woodward) Report. Union members were informed of the massive changes proposed for the industry and what had been achieved. The biggest of them was pensions, to be tied to service dating back to 1942. Next was permanency for the workforce, and lastly, redundancy payments. The Maritime Worker gave all the arguments for and against the proposed contributory scheme. The National Council was fully behind it. Officials worked hard to persuade the rank and file of its merits. ‘It was being realistic,’ veteran Jim Donovan says, ‘that the contributory scheme was the only one that was going to work.’
This was the Stevedoring Employees Retirement Fund (SERF) to be jointly controlled by the WWF and the Association of Employers of Waterside Labour. SUA federal secretary Pat Geraghty subsequently described it as ‘a monumental first Industry fund despite the fact it was limited to one employer and one Union.’ SERF was a defined benefit scheme which meant that irrespective of what members and employers paid in, there was a formula in place which specified what a member was to be paid on retirement. Discussions were held at stopwork meetings throughout the country. Some still thought the shipowners should pay it all, others that full benefits should be available for everyone retiring immediately the fund became operative. The majority endorsed the proposed scheme and SERF was set in place. A year later the first cheques totalling $35,000 were paid to thirty newly retired waterside workers at an average payment of $1250. In just five years a million dollars was paid out, and a little over ten years later that sum had tripled.
ACTU President Bill Kelty acclaimed WWF General Secretary Charlie Fitzgibbon’s pivotal role in winning superannuation as an industrial condition of the transition from casual to permanent employment in the industry. Having a stable, permanent workforce was necessary for the new highly specialised equipment for handling containers and was the overwhelming objective of the employers coming to the NSIC. The WWF was acutely aware of the determination of the shipping interests and the government on the matter of containerisation. Officials took a highly pragmatic and realistic approach to the inevitability of change and skilfully negotiated for the union’s achievable goals. ‘The beauty of SERF’ to former official Jim Donovan was that ‘it was part of the negotiation, part of the deal of the contracting system’ and permanent employment. For this he gives full credit to Secretary Charlie Fitzgibbon and WWF Industrial Officer Norm Docker. ‘Fitzgibbon was a pragmatist,’ Donovan says, ‘good on financial matters, a wonderful wheeler and dealer, winning people over in long conversations showing them how it could be better.’ First however had to come a change in thinking about how that might be done.
Fitzgibbon himself recalled in his autobiography that it was his trip to the US that critically shaped his thinking. There he had not been impressed ‘to learn that the vaunted ILWU Pension Fund, which Healy and others had used to argue for non-contributory pensions in Australia’ had in actuality been achieved at great costs to the members. In return for their ‘alleged non-contributory pensions, Fitzgibbon said, the ILWU had foregone ‘a considerable wage increase, to which its members were entitled.’ Fitzgibbon thought that ‘if that was non-contributory it was a new definition of the concept. It was totally paying,’ he said, ‘especially when the taxation laws of Australia were applied.’ Fitzgibbon didn’t know about the US tax laws but thought they too probably allowed employers to write off the cost as an employment expense. He returned to Australia armed with this insight and with greater resolve to win a better deal. The outcome of the NSIC proved him right.
This WWF success coincided with Pat Geraghty becoming a federal official of the SUA. Getting a similar retirement fund for seafarers became his special project but it had to match the different working circumstances of seafarers. They had not one but multiple employers. The SUA’s Retirement Fund Negotiating Committee, consisting of officials Pat Geraghty, John Brennan and John Benson, started meeting shipowners’ representatives in April 1972. Early in the new year, the Marine Cooks and then the Marine Stewards Unions joined the SUA and the fund was named the Seafarers’ Retirement Fund. It commenced at midnight on 2 May 1973. Seafarers who wanted to participate were to contribute a weekly sum of $1.35, the shipowners were to pay $2.70, and the benefit paid was $6 per week.
SRF was a non-profit organisation, it catered for the members of the industry who left and then returned, and it paid for members who were disabled at work from its own insurance resources. From the start SRF employed its own investment managers and carried its own insurance. The trustees maintained a firm hold on investment policy benchmarks. What started as a $1-plus contribution with a $6 benefit payable, within ten years was a $12 a week contribution with a $140 per week benefit payable. By 1991, when Pat Geraghty retired from the SUA, members were contributing just over $36 per week for a $429 benefit. Subsequent improvements increased the payments to dependent widows. A dependent widow who in 1973 would have received $12 500 would now receive $120 000. While wives were taken care of, at first women seafarers were excluded from the provisions and they had to campaign to get themselves into the fund. In 1984 amendments were made so the dependants of women members too were now provided for.
Maritime unions had broken new ground for superannuation funds. SRF was one of the first to hire investment managers instead of using life insurance companies. It was the first industry fund with multiple employers and the first to introduce an allocated pension. From the start, it provided its own internal administration and self-funded insurance. Its performance had been up near the top since the beginning, in the top twenty of 260 funds including company funds. Both SERF and SRF operated with equal numbers of employers and union representatives as trustees. At first the Chair of the Board of SERF was an employer but this changed in 1993 when WWF secretary John Coombs became the Chair. They were able to refuse investment in uranium, apartheid South Africa, Chile, weapons and other politically or ethically unacceptable ventures.
Having a pension fund has been life-changing for maritime workers. From now on, the Seamen’s Journal and the Maritime Worker regularly carried reports of their fund’s progress, benefit increases, taxation implications, actuarial investigations, interest rates, productivity, distribution of surpluses and reports from the trustees. For people unaccustomed to the language of business and the technicalities of banking and financial planning, it was an educational challenge. Members had to be persuaded that it was to their benefit. They had no experience of superannuation schemes, didn’t realise what it was, and some even had little use of banks. They had always been paid in cash in large sums when they signed off the ship or went on leave, sums that could be easily lost in the pub or on the racetrack. ‘The retirement fund has taken seafarers out of the insecurity of the past’, the Seamen’s Journal said in November 1981. For some it brought freedom, they could plan, travel, and have money to cover large medical costs. In 2006, seafarers spoke of being in a fund you could trust, that didn’t take commissions and fees, that allowed for families, and that treated widows with understanding.
When ACTU President Bill Kelty and Prime Minister Paul Keating started setting up schemes of superannuation for all Australian workers in the 1990s, they looked to the model of the maritime unions. In 1992 superannuation was made compulsory for all employees in Australia a year before the WWF and SUA merged to become the MUA. By 2000 SERF had 10,500 members and $1 billion in assets; SRF had 5,000 members and $550 million in assets. In 2009 the two funds merged to become Maritime Super.
MUA National Secretary Paddy Crumlin describes their achievement as ‘quite incredible’. Former MUA National Secretary John Coombs says, ‘we helped shape a secure financial future for generations of Maritime Super members.’ Jim Donovan says on behalf of the Veterans, ‘we’ve never looked back.’