A place in the sun

The newly-created fund represents the union of two of the country’s longest-running super funds. Behind the merger is a tale of two parallel struggles – from adversity to eventual triumph.

Former SERF Chairman John Coombes remembers a Friday afternoon back in 1968 when he was walking up the gangway with an “old chap” who said it was his last day: “It seemed strange to me, only being new on the waterfront, that nothing had been said, nothing had been done. Here he was, he’d been on the waterfront for 40 years, and he was walking out the gate with his last week’s salary to be picked up and that was all. And I thought to myself, what a harsh industry – and it was a harsh industry in those days.”

The wharfies and the seafarers were among the first blue collar workers in Australia to get super. Before the funds were established, workers were forced to live off a social service pension which, as John recalls, “in many circumstances wouldn’t have even paid the rent”.

Hard times

In the days before super came in, life on the wharves and out at sea was brutally unforgiving. Hard, manual labour took its toll.
Yet those crippled with age, illness and injury were forced to continue working, to escape the ravages of poverty.

On the wharves, these were men in their sixties and seventies, hauling 200-pound sacks of coal, frozen lamb carcasses and asbestos. On the sea, many were forced to make their ships their old-age homes – there at least they had food and a place to lay their heads. All too often they went to their graves penniless and broken.

In 1945, a government medical officer investigated the health of the wharfies. His report was blunt: “I can say without hesitation that there is no other industry that can produce the number of physical derelicts that I have encountered on the waterfront.”
Lung disease was rife from the dusty ship holds, as were hernias from lifting excessive loads. Many of the workers had high blood pressure, and broken bones from falls. Premature ageing,as a result of the harsh conditions, was almost universal.

Wins for the workers

The Waterfront Workers Federation (WWF) won the right for its members to have a retirement pension in 1967. On 9 October, SERF came into being – 25 years before superannuation actually became compulsory. It was a landmark day, not only for the wharfies, but for the history of super in Australia. SERF was the country’s first employer-sponsored industry fund.

On 3 May 1973, the Seaman’s Union of Australia (SUA) won the same right for seafarers, with the signing of the SRF Trust Deed.

Initially, the WWF had demanded that the wharfies’ pension be entirely funded by employers. However, they eventually settled on an arrangement that would see employers contributing 1.5 times the member’s contribution rate, plus 100 per cent for years of service back to 1942.

The seafarers also ended up resorting to a combined contribution scheme. When the SRF began in 1973, the weekly contribution rate was $1.35 for members and $2.70 for employers, with a fund service benefit of $6 per week.

The long road to victory

For both the seafarers and the wharfies, it had been a long and arduous quest.

For the wharfies, the real turning point came in 1953. As the thoroughbreds lined the starting gates to battle it out for the 1953 Melbourne Cup, a battle of a different kind was gathering steam to the north. Thousands of wharfies had answered the call to converge on Sydney’s Leichhardt Stadium for a stop work meeting to discuss the creation of an industry retirement fund.

The gathering marked the first public screening of Pensions for Veterans, the pivotal film produced by the WWF documenting the struggle of its members. Although the idea of a pension for elderly waterfront workers had been proposed as early as 1942, the release of this film is widely acknowledged as a critical point in the Pensions Campaign; the point where the masses were mobilised and the murmur became a roar.

Pensions for Veterans exposed the plight of maritime workers. It was a heartfelt call to arms, urging union members to take up the cause on behalf of their beleaguered comrades.
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The right to an industrial pension is the right of every working man,” the narrator proclaimed. “The young men of today are the veterans of tomorrow. These veterans do not ask for grudging charity, nor do they want the grinding toil of the wharves. They only ask for their just rights – a peaceful place in the sun. Surely it is the nation’s responsibility that these men spend their remaining years with decency and dignity. They have served the community long and well. The nation owes them a debt. It is up to you to see that that debt is paid.”In March 1965, WWF members took their case to Canberra to meet with the Minister for Labour, Harold Holt. Though their proposals were knocked back, they resolved to carry on the fight.

Over the next couple of years, industrial action became widespread. From White Bay to Woolloomooloo, the maritimeworkers rallied behind the cause. They remained steadfast in the face of opposition, and were eventually rewarded with the pension they fought so hard to achieve.

For the seafarers, one of their defining milestones was in June 1968, when Australia-wide meetings of seafarers endorsed a claim for improved conditions. Point four of the claim sought a‘pension or superannuation scheme’.

In April 1972, the seafarers joined forces with the marine stewards and marine cooks. By the time the September Centenary Convention arrived, the SRF had been agreed in principle, covering all three groups of workers. By May the following year, the fund was operational.

Shared values, shared benefits Maritime Super was officially launched at last year’s Patrick Dispute 10th Anniversary Dinner by the new Chair of Maritime Super, Paddy Crumlin. Paddy brings a long history of industry leadership to the role, having been the Chair of SRF since 2001, as well as a director of both super funds.

The new fund is no different than the sum total of the two old funds,” he said. “Two funds for maritime workers – one in the stevedoring industry and one in the seafaring industry – now one fund: Maritime Super. But at the core of that, are maritime workers. That’s what they’ve wanted for the last 40 years, that’s what they still want, and that’s what Maritime Super will deliver.”

The amalgamation of SERF and SRF essentially became an inevitability following the merger of the Seamen’s Union of Australia and Waterside Workers Federation (to become the MUA) in 1993. SERF and SRF were not only aligned with the same union, they had similar cultural values and operational structures. Importantly, both also enabled members to achieve higher than average account balances upon retirement. This is in part due to both funds’ dedication to maintaining low fees, not paying commission to financial planners and returning all profits to members. The funds also benefited from regular additional contributions, solid histories of long-term investment returns and a strong emphasis on acting in the best interests of members.

The merged fund will provide the opportunity to enhance these benefits through reduced operating and compliance costs. As a larger super fund, Maritime Super will also have greater purchasing power, which means it will be able to improve services and offer a broader range of products. In addition, the merger will facilitate greater accessibility for members, with offices operating in both Sydney and Melbourne.

However, the merger isn’t all about ‘bigger’ being ‘better’. “Big is only beautiful if you maintain all the transparency, all the involvement of people, so they will continue to own the fund,” said former SRF Director, Pat Geraghty. “No matter whether you’re a seaman, a wharfie, a master or an engineer, it’s your fund, it’s my fund – it’s our fund.”

In creating Maritime Super, the Board is conscious of upholding this sense of ownership. Commenting on the shared history of seafarers and waterfront workers, Maritime Super CEO, Peter Robertson, remarked: “It’s a very long history; it’s a very proud history, and certainly one that’s contributed greatly to the development of compulsory superannuation and industry funds in this country. It’s not something that we’ve lost sight of and we want to make sure that we carry that proud history forward into the new fund.”

GLOBAL CRISIS

2008 proved to be an historic year for all markets including global equity markets and the Australian equity market in particular. The five-year bull market in Australia, led by the resources boom, moved rapidly to become one of the worst bear markets on record. The initial driver behind the sharp reversal in sentiment and subsequent decline in markets was the emergence of a global credit crisis (now termed the Global Financial Crisis), driven by the continued fallout from the US sub-prime debt market (which began to unravel as early as mid–2007) and which began to permeate debt and equity markets more widely. Financial stocks and those with excessive levels of gearing were the initial casualties, which drove the market lower to mid–2008. The collapse of Lehman Brothers in September 2008 in the US coincided with a significant restriction in credit availability as financial institutions started to hoard capital and markets witnessed a ‘flight to safety’ in government bonds, particularly US Treasuries.

Volatility across all asset classes hit extreme levels during 2008 as risk aversion hit record highs and investors rushed into cash and bonds.

Usually defensive assets like bonds had specific sectors which performed poorly (such as corporate and high–yield securities) as investors became concerned with the credit implications of portfolios and the underlying issuers.

In the last quarter of 2008, the global economic meltdown continued with recessions declared in at least 19 countries and unprecedented levels of volatility in global equity markets. Declining global growth led to commodities and commodity stocks being sold off heavily, and had a flow-on effect on the Australian dollar which declined significantly, falling from a high of 98 US cents in July to 61 US cents in the fourth quarter. The year ended with governments and central banks taking unprecedented steps to stimulate economies by providing rescue packages to support both the banking system and consumer spending, and significantly reducing interesting rates. This reduction in interest rates was an attempt to maintain liquidity and growth and reduce stress on both individual and business borrowers. Cash rates fell to all time lows in many countries.

While there are undoubtedly risks ahead, it is important to remember that a recovery from the current market conditions will eventuate. Financial markets are forward looking and have already priced in a lot of bad news. Markets should begin a sustainable recovery once signs emerge that credit markets are unfreezing and government stimulus packages start to take effect.

INVESTMENT MARKET UPDATE

At Maritime Super, we know that bear markets (i.e. markets that are falling) are a normal part of the investment market cycle and we take market falls into consideration when we plan our overall investment strategy. Superannuation, by its nature, is a medium to long-term investment, which means our strategy has a longer-term view.

However, this does not mean we sit back and watch during such turbulent times. The investment team meets regularly to review the investment portfolio in light of current investment market conditions. Whilst maintaining our long-term view, our strategy enables us to respond appropriately to current conditions and take advantage of opportunities as they arise.

As part of our commitment to providing members with flexibility and choice, Maritime Super now offers members five investment options to choose from, ranging from Cash through to Growth. If you’d like to find out more about our range of options,visit the new Maritime Super website –www.maritimesuper.com.au.