LGSS/Active Super, a tragedy in four parts
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- Published: Thursday, 27 February 2025 09:30
Local Government Super was established on 1 July 1997. This followed two years of negotiation with the State Government to allow the separation from State Super and First State, for local government employees in New South Wales to have their own fund. The local government employers’ organisations and the unions wanted better representation, our own directors, more control over members’ futures, lower fees, and to reflect the values inherent in local government.
Great ambitions. As directors we discovered we didn’t have to own tobacco, a commitment that developed and led to significant responsible investment achievements and then, in 2015/2016 a nosedive - a narky and petulant regulator, a compliant Board, the loss of the long-standing and much-loved CEO Peter Lambert, who had faithfully, honourably and loyally protected our interests over 12 years.
A succession of failed replacements, whose appointments confronted us with the magnitude of the loss, and whose exits confirmed it. All the while the Board fiddled. Nero would have been proud.
It got worse, a so-called “independent” director appointed as Chair who wasn’t from local government (yes, one of the 7-1 votes) and then after a long investigation, last year the regulator ASIC launched a prosecution in the Federal Court, alleging “greenwashing” - that Active Super had conveyed a false impression or misleading information to emphasise green/environmental/ethical credibility. On 5 June 2024 Justice O’Callaghan humiliated the Fund with substantial findings of Active Super’s guilt for claiming they were doing things which they were not. It’s little comfort that one charge about tobacco wasn’t confirmed, the rest were.
The prosecution challenged the fund’s credibility and the judgement demolished it. We await a judgement on penalty from the Federal Court -argued before the judge on 17 December, with ASIC pushing for $13.5 million and $2.5 million argued by the Fund.
And now, on 1 March, Local Government Super/Active Super will disappear - merged with, but more merged into, Vision Super. The Victorian equivalent covering local government employees, a comparable size but less money under management. And forever after will be Vision, with no acknowledgement of our LGS history.
The historic and world-leading responsible investment abandoned as the Fund folds into the approaches taken by Vision Super, whatever that might be.
Vale, Local Government/Active Super, rest in peace.