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Forty-six years with REI Super
From $1 million to $2 billion: Forty-six years with REI Super
Ian Armstrong reflects on his career with the Real Estate and Stock Institute of Australia Superannuation Fund for Directors and Employees
On 1 July, 1975, I became a member of the ‘Real Estate and Stock Institute of Australia Superannuation Fund for Directors and Employees’. Real Estate remuneration is often ‘lumpy’ and superannuation, apart from the forcedsaving attributes, was a way to help average that income. I encouraged senior colleagues in my office to join me.
At the time, superannuation was somewhat unusual. It was mainly applicable to employees in the public sector and white-collar workers in large private sector companies. The vast majority of members were in defined benefit funds. Superannuation was often referred to as ‘golden handcuffs’ as the process of drip-feed vesting was used as a tool to retain employees.
The advent of accumulation funds such as the REIA fund was innovative and members were generally fully vested immediately.
Superannuation legislation amounted to no more than a handful of pages in the Income Tax Assessment Act, which set the conditions for tax exemption – there was no Superannuation Guarantee (SG) or SIS legislation. In the private sector, lump sum reasonable benefit limits (RBLs) were in place and managed through a short ATO circular.
Ian Armstrong
Superannuation funds were tax free, with no tax on contributions or earnings, and merely 5% on lump sum benefits. All that changed in 1983 when the newly elected Labor Government introduced a tax on lump sum benefits. Every Government since has had the urge to tinker with Superannuation. Sometimes, but not always, for the better.
On August 15, 1985, I wrote to the fund querying inadequate investment performance. That led to me being appointed to the ‘Permanent Standing Committee of the Real Estate Institute of Australia Superannuation Fund.’ The purpose of the Committee was to meet twice yearly to receive a report from the Fund Managers, Macquarie Counsellors, as to fund activity.
With the Government interest in Superannuation evolving so too did our structure. On July 8, 1987, I was appointed a Foundation Governor of the REIA Superannuation Fund Pty Ltd, which was the new Trustee for the REIA Superannuation Fund. My co-governors at the time were Kris Callaghan (Chair), Micheal Forsyth, Russell Jackson Phil Roberts (Fund Secretary) and Bill Woolcock. On the 1993 I resigned from the Board of REIA Super, re-joining in 1996 when the REIA appointed me again as an employer Director. Shortly after that the fund became independent and adopted a member elected Board model, with the approval of APRA.
I was elected to the Board from October 2001 for a four-year term. There followed a series of subsequent elections where I was able to remain on the Board.
Despite the changes we do have a better Superannuation system now than when I joined in 1975. There is now near universal coverage, rules around disclosure and member communication, rules around vesting and preservation, improved governance, and properly developed allocated pensions.
On the other hand, it has been a long, complex and costly road to get to where we are today and the political appetite for change continues. I have had a long and interesting second career in the superannuation industry. Involvement has substantially increased my knowledge and I have met and worked with many committed and dedicated people. I have fond memories of many co-directors, staff and suppliers.
It has been a privilege to represent our members and I have enjoyed a stimulating and rewarding 46 years or so of involvement as member, governor, trustee and director while the Fund rose from $1 million to $2 billion funds under management.
I leave on a high as the fund is rated the eighth best performing fund in Australia for the 2020-2021 year. I trust I have made a worthwhile contribution in return.
Author - Ian Armstrong REIV Member since 1974
