MySuper. Evolution Now Future

Transcription

1 MySuper Evolution Now Future

2 Three basic types of MySuper 1. Single Diversified Balanced Strategy 2. Simple or Switch Lifecycle Strategy 3. Cohort Lifecycle Strategy also know as a glidepath or target date

3 Our questions What is your MySuper and why did you select it? Industry funds Corporate funds Retail funds

4 Asset allocation of industry funds with a Single Diversified Balanced MySuper 100% 90% 80% 70% 60% 50% 40% AustSuper Care Vision Super VicSuper AustSafe HIP CBUS Prime Super REI Super MTAA Super Hostplus LUCRF REST Club Plus Super Energy Super TWU Legalsuper HESTA NGS Super Tasplan Plum UniSuper IOOF Russell Media Super EquipSuper Aust Christian Maritime Super Growth Defensive Note that property and infrastructure are assumed to be growth assets unless otherwise advised.

5 Asset allocation of industry funds with a Single Diversified Balanced MySuper 100% 90% 80% 70% 60% 50% 40% AustSuper Care Vision Super VicSuper AustSafe HIP CBUS Prime Super REI Super MTAA Super Hostplus LUCRF REST Club Plus Super Energy Super TWU Legalsuper HESTA NGS Super Tasplan Plum UniSuper IOOF Russell Media Super EquipSuper Aust Christian Maritime Super Growth Defensive Note that property and infrastructure are assumed to be growth assets unless otherwise advised.

6 Our question - What factors did you consider when designing your MySuper? Single Diversified Balanced funds: Average age Average account balance now and at retirement Expected departure/retirement age Level of disengagement

7 Our question - What factors did you consider when designing your MySuper? (continued) Single Diversified Balanced funds: (continued) Behavioural finance Level of super and other assets outside of the fund Access to advice Nature of choice options

8 Asset allocation of industry funds with a Single Diversified Balanced MySuper 100% 90% 80% 70% 60% 50% 40% AustSuper Care Vision Super VicSuper AustSafe HIP CBUS Prime Super REI Super MTAA Super Hostplus LUCRF REST Club Plus Super Energy Super TWU Legalsuper HESTA NGS Super Tasplan Plum UniSuper IOOF Russell Media Super EquipSuper Aust Christian Maritime Super Growth Defensive Note that property and infrastructure are assumed to be growth assets unless otherwise advised.

9 Asset allocation of industry funds with a Single Diversified Balanced MySuper 100% 90% 80% 70% 60% 50% 40% AustSuper Care Vision Super VicSuper AustSafe HIP CBUS Prime Super REI Super MTAA Super Hostplus LUCRF REST Club Plus Super Energy Super TWU Legalsuper HESTA NGS Super Tasplan Plum UniSuper IOOF Russell Media Super EquipSuper Aust Christian Maritime Super Growth Defensive Note that property and infrastructure are assumed to be growth assets unless otherwise advised.

10 Asset allocation of industry funds with a Single Diversified Balanced MySuper 100% 90% 80% 70% 60% 50% 40% AustSuper Care Vision Super VicSuper AustSafe HIP CBUS Prime Super REI Super MTAA Super Hostplus LUCRF REST Club Plus Super Energy Super TWU Legalsuper HESTA NGS Super Tasplan Plum UniSuper IOOF Russell Media Super EquipSuper Aust Christian Maritime Super Growth Defensive Note that property and infrastructure are assumed to be growth assets unless otherwise advised.

11 Simple or Switch Lifecycle Strategy Generation 1 Lifecycle Members switch from one diversified portfolio to another Switches happen at defined ages Between 2 and 4 portfolios Each portfolio has a different pricing point Generally adopted by not-for-profit funds

12 Simple or Switch Lifecycle Strategy - examples 100% 80% 60% 40% 20% 0% AUSCOAL AON FirstState Super Guild Sunsuper Telstra Virgin

13 Cohort Lifecycle Strategy Generation 2 Lifecycle Designed to meet a member s defined goals Portfolios built for members within a particular age cohort Typically 6 10 year cohorts A few have 10 5 year cohorts Can be active or passively managed Generally adopted by retail funds

14 Cohort Lifecycle Strategy An example Ben, aged 22 joins the fund built for those born in the 1990s 100% 90% As Ben and his fellow cohort members reach their 40s, the investment strategies start to change and the focus moves from taking on lots of risk towards taking a more balanced approach to risk % Growth % Defensive Allocation to Growth Assets 80% 70% 60% 50% 40% 30% 20% 10% Ben, and other members born in the 1990s, will gain access to long term investment strategies such as property and infrastructure AMP 1990s Fund Human capital AMP 1990s Fund Super AMP 1990s Fund AMP 1990s Fund As Ben reaches retirement the portfolio will be targeting strategies that will be protecting the assets he has accumulated and protecting against big market shocks AMP 1990sFund 0% Age

15 Cohort Lifecycle Strategy - examples 's 1980's 1970's 1960's 1950's 1940's AMP SignatureSuper ANZ Smart Choice BT Super for Life CFS FirstChoice Mercer SmartPath

16 Our question - What factors did you consider when designing your MySuper? (continued) Lifecycle funds: As per Balanced funds PLUS Changing needs of the members over their lifetime Level of homogeneity Ability to segment the membership Impact of social security in retirement

17 Universe of funds Averages Type of Fund Avg AA - Growth Avg CPI + objective Avg Risk Band Avg Base Fee Avg PBF Industry Balanced 74.2% 3.4% % 0.07% Retail&Corporate Balanced 66.4% 3.2% % Unspecified Lifecycle Gen % 2.9% % 0.03% Lifecycle Gen % 2.9% % Unspecified Note that the above table reflects the results for the selected 45 MySuper options.

18 Universe of funds Averages on lifecycle gen 2 Lifecycle Gen 2 Avg AA - Growth Avg CPI + objective Avg Risk Band Avg Base Fee Avg PBF 1940s 35.8% 1.6% % Unspecified 1950s 52.8% 2.2% % Unspecified 1960s 77.2% 2.8% % Unspecified 1970s 87.3% 3.3% % Unspecified 1980s 89.2% 3.4% % Unspecified 1990s 90.0% 3.7% % Unspecified Note that the above table reflects the results for the selected 45 MySuper options.

19 Universe of funds Averages (continued) Type of Fund Avg AA - Growth Avg CPI + objective Avg Risk Band Avg Base Fee Avg PBF Industry 68.6% 3.3% % 0.06% Retail 70.0% 2.8% % Unspecified Note that the above table reflects the results for the selected 45 MySuper options.

20 Our question - What is MySuper best practice? Single Diversified Balanced Funds Focus on after tax outcomes Lifecycle Funds To Retirement or Through Retirement Integrated with social security and external asset Multiple pricing points

21 MySuper Evolution More diversity than ever before Lack of comparability Now Improved investment governance Focus on net returns and reduced fees Future MySuper pension products Integration with Social Security Multiple pricing points

22 Q&A Panel: Sean and Fiona

23 Defined goals-based monitoring