The energy transition - what role can we play?
Employers | 4/04/2018 |
4 min read
The energy industry is in transition. Independent of the wavering political debate, a number of energy industry leaders have either declared, or are already playing their hand in reducing their company’s dependence on fossil fuel as an energy source and increasing their stake in renewables.
As a super fund that has been immersed in the energy sector since 1931, Equip has first-hand experience of the challenges this transition is presenting to members employed in the industry and the communities to which they belong.
One of the primary drivers for Equip joining the Clean Energy Council in 2017 was to better understand the changes taking place in the sector, so we could better engage with employers to provide support and advice to employees impacted by change.
For some members, the closure or scaling down of energy plants means earlier than expected retirement, a change in circumstance with profound effects on their perception of themselves, their relationships with family and friends and, not least, their financial affairs. If they are in regional locations, it may even mean uprooting the family to take jobs in other places.
No better example of this was the closure in 2017 of Victoria’s Hazelwood power station, operated by French company, Engie. The question for Equip was how to best support the more than 400 fund members affected by the event? What is the appropriate role and responsibility for a super fund when this happens?
The answer to this was informed by the fund’s operating model which, due to a heritage in defined benefits, means it has forged close relationships with major employers who have a responsibility to ensure the superannuation benefits due to their employees are properly funded.
Having engaged with Engie on a strategy to protect its defined benefit fund against any sudden fall in investment markets between the closure announcement and the day of closure, the fund’s relationship team also negotiated access to workplaces to help members manage the change.
Equip also deployed fund staff and members of its financial planning team to the Latrobe Valley over an extended period to ensure Engie employees and fund members had ready local access to support and advice through the transition.
New entrants into the renewables sector are providing a lifeline for some Equip members, many of who have highly specialised and technical skills that are transferrable across the energy sector. When they change jobs, many of them choose to remain with Equip, a fund of which they have been members for decades.
The Hazelwood example is one of several that demonstrates a role that Equip believes a super fund can play in taking a broader view of its responsibility to members than simply delivering on the ‘hygiene’ member expectations of strong long-term investment returns and keeping fees low.
It also highlights that close engagement between employer and fund is a vital component of supporting employees impacted by changes to their employment.
Engie proactively connected with Equip when it made its decision on Hazelwood’s future, the key factor being that it did so well in advance of the closure date. It allowed Equip to organize and deploy resources for the maximum benefit of both employees and employer.
This transition in the energy sector is set to continue over many years, with sustainability questions applying to people and communities as much as to energy resources and environment. It is on issues of people and community where your super fund should be positioned to ably assist you and your employees.
Equip is keen to extend its relationships into the renewables space and be as valued a partner and community member for emerging entities and their employees as it has been to traditional operators in the sector.
Thanks to a merger with the Rio Tinto Staff Fund in July 2017, Equip has been empowered to extend its geographical footprint to all corners of Australia, opening new offices in Brisbane and Perth to supplement those in Melbourne, Sydney and regional Victoria, from where it services South Australia and Tasmania.
This is important to the way the fund connects and delivers services through the workplace through on-site education seminars and other programs.
Equip’s profit-to-member model also extends to its financial planning service, ensuring expert advice is available to members at an affordable price.
You can find more information about how easy it is to make Equip your company’s workplace fund by contacting Tyson Adams on (03) 9248 5940 or email: firstname.lastname@example.org