The Howard government has an appalling record when it comes to funding
federal superannuation schemes, and is now sitting atop a $90 billion
black hole that future generations will have to fund. There is however,
one large Federal scheme which is fully funded – Telstra Super. But as
we can reveal today, it has its own problems.
Telstra Super was
established in June 1990 as trustee for the Telstra Superannuation
Scheme. Today it’s one of Australia’s largest corporate superannuation
funds, with more than 70,000 members and $7 billion in assets.
Super, which is run by a board with equal representation from staff and
management, came out with a tender document to replace their legacy
SuperB system in September 2002 with the objective of achieving board
approval by April 2003. The planned objectives of the tender were as
a) Telstra Super, in its goal to maintain
competitiveness, is continually evaluating its technological competency
to ensure it is aligned to its strategic direction.
b) By upgrading its Administration Systems, Telstra Super is seeking to use technology as an enabler for:
- improving its overall efficiency and its effectiveness in the management of the products and services listed above; and
- extension and expansion of its current product and service offerings.
In line with its strategic plan, Telstra Super has targeted December
2003 for cut over from the current system to a new System for all 11 of
the funds that they administer.
The project is now more than 15 months late and, as yet, not a single member has been migrated to the new system.
major milestone is scheduled for April Fool’s Day when, according to
inside information, the Telstra Rollover fund’s 27,000 members are
scheduled to go live. One really needs to understand that a Rollover
fund is about the simplest fund to administer as contributions have
largely ceased on a regular basis and only very simple interest
calculations and an annual statement are sent to members.
estimated that in excess of 10 Telstra Super people plus numerous
people from the software supplier Financial Synergy have been working
on the customisation and conversion of the Acurity package for more
than two years. If the latest revised schedules are met with the
remaining funds being implemented by December 2005 the project will
have a cost over run of up to $2 million.
One has to ask the
question as to what the Telstra Super trustees are doing to minimise
the impact on members’ superannuation savings which are ultimately
funding the costly overrun of the project.
Given all this drama,
you have to also wonder why Telstra would want to keep the KAZ super
administration business AAS. If Telstra can’t administer its own super
fund properly, how can they be trusted to look after everyone else? The
potential liabilities in super administration are huge – so watch for
the due diligence team on T3 to order the sale of AAS, if it isn’t