Profile Gabriel Szondy

Despite working as a superannuation specialist for more than 30 years, Gabriel Szondy started saving for retirement only a decade ago, aged 50.

"I could kick myself from one end of the planet to the other for not contributing earlier," he laments. As a tax partner at several big accounting firms, he was self-employed and not covered by the SGC compulsory super scheme introduced in 1992.

Of course, he could have made voluntary contributions - but didn't. "It was lethargy, being blase, thinking: 'Do I really need to worry? Yes, but I can't be bothered."'

Worse, he did voluntarily contribute to super in his 20s but cashed out when he switched jobs and spent the lot.

Szondy may not have a textbook approach to his own retirement savings but he is regarded as one of Australia's most knowledgeable superannuation practitioners, after deciding to focus on the area in 1978.

Six months later, his "easy" specialisation started getting busy as the Tax Office began to issue complicated rulings on reasonable benefit limits and compulsory investment in government bonds, followed a few years later by rules on eligible termination payments.

In the mid-1980s, as the unions joined with employers to establish industry funds, Szondy helped set up the CARE fund (he's still a director) and REST.

He also wrote the first compliance manual for the Occupational Superannuation Standards Act in 1987.

After 32 years working in superannuation at Arthur Young (now part of Ernst & Young), Price Waterhouse and Coopers & Lybrand (now merged as PricewaterhouseCoopers), plus a three-year stint at Lend Lease, Szondy "retired" in 2007.

However, he remains active in the super industry as a special adviser to the Centre for Investor Education, which holds eight conferences a year for super fund decision makers such as trustees, chief executives and chief information officers.

At the end of the conferences, which Szondy chairs, delegates are surveyed anonymously for their opinions on topical issues. He says two are at the forefront of delegates' minds at present: fees and mergers.

On mergers, he says funds are under huge pressure to create economies of scale by getting bigger. "But there are so many funds of less than $4 billion that are very well run and generate very good returns," he says, noting that 10 years ago, there were about 3000 funds in Australia, which is now reduced to about 300.

The second concern is the high fees charged by private equity and hedge fund managers. Szondy says a typical fee structure is 2 per cent upfront and 20 per cent a year, based on the funds the manager invests on behalf of the super fund.

"It's got to the stage now where it's actually highway robbery," he says, but adds that trustees also must do their homework properly on the fees charged and the quality of the managers they use.

Szondy also believes contribution limits should be replaced by retirement benefit limits. "At a time when most people can afford to start putting money into super, especially women who have had breaks in their careers for babies, they are restricted by inane rules, which make no sense."

THE BIG QUESTIONS

Biggest break In 1978, a partner at Price Waterhouse [where Szondy was a senior tax accountant] told us we all had to pick an area to specialise in. I picked superannuation because it was [then] a few short, easy sections of the Tax Act.

Biggest achievement Being involved in the mid-1980s with championing the cause of non-profit funds and compulsory super.

Biggest regret I didn't start saving for super early enough.

Best investment Super. Even though I started later, there's no doubt it's my best investment, despite the GFC.

Worst investment I invested in a thoroughbred horse-breeding venture when I didn't know the front end of a horse from the back. I lost the lot but it was a really good lesson to invest only in things you know about.

Attitude to money The area I'm in has taught me the value of putting money aside for retirement. I look at some fund members retiring with $30,000, who will have to rely on the aged pension, while others with $300,000 upwards can survive really well in retirement because they've been able to save throughout their working lives.

Personal philosophy Have fun. When I was a partner [at various major accounting firms], I wore the Santa outfit at Christmas and the rabbit outfit at Easter and I walked the floor talking to people. A lot of people take life too seriously. You've got to have a sense of humour.