LUCRF SUPER

ABOUT LUCRF

Super pioneers

The story of LUCRF Super

Today, many of us take our super for granted. We see it as a basic right of employment and don’t realise that just 30 years ago everyday workers like us weren’t entitled to superannuation as we now know it.

Click here to see a video clip of the LUCRF Super story

The way it was
Before 1978, the average Australian worker wasn’t entitled to superannuation – it was generally an exclusively white collar benefit, which meant that everyday people were forced to rely solely on the Age Pension when they retired. Those workers who were lucky enough to have some sort of retirement benefit didn’t enjoy the same flexibility and rights that we do today. The arrangements were at the discretion of their employer, which often meant that if an employee left their employer, or lost their job, they lost all of their employer contributions.

Our Origins – establishing Australia’s first industry superannuation fund
LUCRF Super was formally established in December 1978 by the Federated Storemen and Packers Union (FSPU, now the National Union of Workers) who recognised that the existing superannuation system provided few benefits for ordinary working people. The Union started the Fund on the basis of people having the right to choose which Fund they wanted to be in, that their super was portable and could be taken with you from job to job. They wanted full vesting of all amounts contributed to be the members’ super benefit and to provide fair retirement benefits for all.
 
In a revolutionary approach employers were asked to join the Trustee Board which established a long standing partnership between these industrial partners for the benefit of all members. The Skin and Hide Industry Employers Association was the first employer organisation to agree to make contributions on behalf of their employees and participate on the Board.
 
The Old Super System
In 1978, Australia’s superannuation system was very different from the system we all enjoy today. Back then, super was considered a reward for long and loyal service and was controlled and operated by employers and the insurance industry.
 
To qualify for super, employees were previously required to spend 35-40 years with one company. The old system ignored the reality that most people changed jobs throughout their working life. When employees left a company, most working people were limited to a ‘leaving benefit’ and had no real hope of an adequate superannuation benefit to enjoy in retirement.
 
LUCRF Super – The Alternative
When established, LUCRF Super offered a radical alternative to superannuation that operated like a bank account. Member and employer contributions accumulated with investment returns from a balanced investment portfolio, less minimal fees. 
 
Members could remain with LUCRF if they moved to a new employer providing the new employer agreed to contribute. If the employer did not agree to contribute, the member had the option of having their entire benefit paid out. This approach to superannuation recognised that money contributed by an employer was part of the employees deferred pay and as such belonged to the employee. It stayed where it belonged, in the members’ super account.

The Concept, Our Collaborative  Approach
The FSPU and LUCRF Super’s original concepts formed the foundation for our new approach to superannuation that in time became the principles that now underpin the Australian Superannuation system.
  • Portability - The ability to take your super with you from job to job
  • Full Vesting – Employer contributions were deferred pay that belonged to employees and should remain in their super account
  • Employee Owned – The money in super belonged to employees and they had all the rights that come with ownership

From 1978 to Now
Superannuation has changed significantly from 1978….

In the early 1980’s, an agreement between the ALP and the ACTU known as ‘The Accord’ saw unions agree to limit wage claims in return for social wage increases in areas like health care and superannuation.

In 1985, as part of Accord Mark II, the Federal Government supported a productivity claim that provided a 3% employer contribution to an approved superannuation fund.

In 1987 the Occupational Superannuation Standards Act was introduced and reflected the FSPU’s original principles of almost a decade earlier, including:

  • Portability of employer and employee contributions and earnings; 
  • Preservation of super until age 55;
  • Greater member involvement and control of super through equal Board representation; and
  • Significantly increased reporting requirements to better secure member benefits.

In 1991, the Hawke Government deemed the 3% contribution too small and legislated for a prescribed level of superannuation for all employees. The new system know as the Superannuation Guarantee (SG) was introduced and is in place today providing superannuation for all employees.

Our Legacy
When the FSPU established LUCRF Super, the lasting significance of its actions were still only a dream. More than thirty years on, the Union’s ideology and vision have provided the foundation for the modern day Australian Superannuation system. Financial independence and security in retirement, has become a reality for thousands of ordinary Australians.

Today, LUCRF Super has grown to more than 180,000 members and over $2.4 billion in funds under management.

This is the LUCRF legacy.





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