A GROWING NEST EGG RISE IN LOW-COST OPTIONS. Report No. 4 September 2013

Size: px

Start display at page:

Download "A GROWING NEST EGG RISE IN LOW-COST OPTIONS. Report No. 4 September 2013"

Rosalyn Armstrong
5 years ago
Views:

a Report No. 4 September 2013 A GROWING NEST EGG Superannuation is currently a $1.62 trillion industry, a figure that is tipped to double over the next decade.

In a recent White Paper Super system evolution: Achieving consensus through a shared vision - the Association of Superannuation in Australia (ASFA) observed that the ratio of workers to retirees

With approximately 75% of retirees on a full or part-pension today it is inevitable that there will an increased future focus on self-funding retirement.

1 a Report No. 4 September 2013 A GROWING NEST EGG Superannuation is currently a $1.62 trillion industry, a figure that is tipped to double over the next decade. While the amount sounds impressive, it may not yet be enough to cater for the increasing number of retirees. In a recent White Paper Super system evolution: Achieving consensus through a shared vision - the Association of Superannuation in Australia (ASFA) observed that the ratio of workers to retirees today is 5:1; a ratio that is projected to almost halve to just 2.7:1 by With approximately 75% of retirees on a full or part-pension today it is inevitable that there will an increased future focus on self-funding retirement. For most workers, self-funding retirement will require more than relying on superannuation guarantee (SG) contributions. ASFA s most recent Retirement Standard estimates that a couple wanting a comfortable retirement in 2013 require an annual income of approximately $56,400 ($41,200 for singles). With some essential living costs increasing substantially year-on-year energy costs rising by more than 17% over the past twelve months, for example this is a figure that will only increase over time. Choosing a superannuation fund that represents the ideal mix of investment options, account access, insurance options and premiums, availability of advice, fund performance and cost and investment strategy is an important factor in boosting your future nest egg. CANSTAR s superannuation star ratings assess 76 superannuation funds that are directly for individuals to purchase without an intermediary (e.g. without going through a financial planner) to determine those that represent outstanding value for money. RISE IN LOW-COST OPTIONS Industry superannuation funds have long been the flag bearer for low cost, high performance funds. Some of Australia s retail institutions, though, are stepping up to the plate with the introduction of streamlined products at a competitive price. The particularly noteworthy feature of the retail products is that they can all be integrated into a customer s online banking platform and, with the exception of ING Living Super, can be accessed using the mobile app of the respective institution. This provides visibility of superannuation always a challenge for an industry that has struggled for many years with low consumer engagement. Being via internet banking also means that customers can quickly and easily check their account details, change any personal details, peruse and change their investment and insurance options and monitor the contributions into their superannuation fund. Some of the retail products that have caught our eye recently are outlined on the following page. YOUR GUIDE TO PRODUCT EXCELLENCE

Name Fees Features MER Admin fee ANZ SmartChoice Super http://www.superannuation.anz.com/ 0.

2 Name Fees Features MER Admin fee ANZ SmartChoice Super % $50 pa Provides a lifestage mix or the choice of 8 investment options as well as death and TPD insurance. Commonwealth Bank Essential Super uperannuation/essential-super.html Suncorp Everyday Super y-super Bendigo & Adelaide Bank SmartStart Super art-super ING DIRECT Living Super rement/living_super.htm 0.80% $60 pa Provides a choice of lifestage investment option or three manual choice options. Offers death and TPD insurance, with a level of pre-approved cover upon joining the fund. 0.85% $78 pa Offers a preselected lifestage investment mix or the option to choose from six investment options. Offers a default level of life and TPD insurance upon joining, with option to apply for more. 0.82% $98 pa Offers a default age-based strategy or the choice of 10 investment options. Provides the option of death, TDP and income protection insurance. 0.25% 0.50% Provides a default balanced option with no admin or management fees, as well as the choice of 13 investment options. Offers death, TPD and income protection insurance. COALITION S PAID PARENTAL LEAVE SCHEME A NEST EGG BOOST FOR PARENTS-TO-BE Previous CANSTAR analysis has identified the potential cost to a retirement nest egg caused by parents taking time off work. In March this year we calculated that women on an average starting salary of $50,000 from age 21, indexed to CPI each year, would potentially lose superannuation benefits of more than $95,000 by taking three separate years out of the workforce. Women taking five years out could potentially lose almost $160,000 and women taking a decade out of work could be more than a quarter of a million dollar behind their continuallyworking peers. The government s proposed paid parental leave policy, if implemented, will help to mitigate this retirement cost. The policy, which proposes to provide women with six months of fully-paid maternity leave at their current salary (up to a cap of $150,000), also proposes to include a superannaution guarantee (SG) contribution at the current SG level of 9.25%. Under the proposal fathers will be eligible for two out of the 26 weeks as dedicated paternity leave at their actual wage, if they opt for it. This payment will also include superannuation at the SG rate. The government s proposed scheme is intended to commence on 1 July YOUR GUIDE TO PRODUCT EXCELLENCE 2

3 For women in particular, the retirement nest egg benefit of this paid parental leave proposal is substantial. Consider this example: Lisa is 21 when she starts in the workforce, on a salary of $50,000, indexed to inflation. At age 30 she takes one year off work to have her first child. AT age 32 she takes another year off work for her second child and at age 34 she takes a final year off work for her third child. The potential impact on her superannuation is as follows: Final superannuation Difference balance at age 60 If no time off work $1,024,837 3 separate years, proposed scheme $975,909 $48,928 3 separate years, current scheme $926,981 $97,856 Source: CANSTAR. Assumes an earning rate of 8% pa. In other words, while women s superannaution balance will still take a hit due to time off work, the impact will be reduced from a potential $97,856 under the current leave scheme to $48,928 under the government s proposed scheme. CANSTAR COMPARES SUPERANNUATION For many Australians, superannuation is their largest single investment asset, yet public engagement with superannuation remains too low. With hundreds of superannuation funds in the market, how do you know what is best for you? Every year we undertake extensive research and analysis to rate superannuation products according to our consumerfriendly star ratings methodology. This looks at a balance of pricing and features on the assessed products; pricing and features which are rated for importance according to your life stage. CANSTAR compared 76 superannuation funds, with our primary criterion to compare only those funds which any working member of the public could join. For this reason we did not rate corporate funds, restricted industry and employer funds or self-managed super funds. Instead, we concentrated on industry funds that anyone can join and retail funds that you can join without the stipulation of going through a financial advisor. That way, we ensured we were comparing apples with apples. We strongly believe the value of a superannuation product depends largely on how the consumer uses it and that s what makes our comparison different it guides you through the steps to the superannuation products that may suit your individual needs at different stages of your life, from those starting out to those drawing down on their superannuation. Key lifestages considered are: Starter New to the workforce, just starting out. Nester Beginning to build wealth and build for the future. Wealth Accumulator Has accumulated a decent amount of superannuation and looking for more investment options. Pre-retiree Large superannuation balance with a conservative approach to investment. For full details of the research criteria please see the research methodology document contained within this report. YOUR GUIDE TO PRODUCT EXCELLENCE 3

WHICH FUNDS STOOD OUT? In CANSTAR s 2013 ratings, the superannuation funds offered by a number of financial institutions achieved a five-star ratings.

4 WHICH FUNDS STOOD OUT? In CANSTAR s 2013 ratings, the superannuation funds offered by a number of financial institutions achieved a five-star ratings. The financial institutions that received a five-star accolade in at least one lifestage segment are: Please note that not all products are rated five stars in each key lifestage. Please refer to the star ratings summary contained in this report for the specific product names of the five-star rated products from each of the above financial institutions. DISCLAIMER: To the extent that any CANSTAR data, ratings or commentary constitutes general advice, this advice has been prepared by CANSTAR Research Pty Ltd ABN AFSL and does not take into account your individual investment objectives, financial circumstances or needs. Information provided does not constitute financial, taxation or other professional advice and should not be relied upon as such. CANSTAR recommends that, before you make any financial decision, you seek professional advice from a suitably qualified adviser. A Product Disclosure Statement relating to the product should also be obtained and considered before making any decision about whether to acquire the product. CANSTAR acknowledges that past performance is not a reliable indicator of future performance. Please refer to CANSTAR Research s FSG for more information at All information contained herein shall not be copied or otherwise reproduced, repackaged, further transmitted, transferred, disseminated, redistributed or resold, or stored for subsequent use for any purpose, in whole or in part, in any form or manner or by means whatsoever, by any person without CANSTAR s prior consent. All information obtained by CANSTAR from external sources is believed to be accurate and reliable. Under no circumstances shall CANSTAR have any liability to any person or entity due to error (negligence or otherwise) or other circumstances or contingency within or outside the control of CANSTAR or any of its directors, officers, employees or agents in connection with the procurement, collection, compilation, analysis, interpretation, communication, publication, or delivery of any such information. Copyright 2012 CANSTAR Pty Ltd ABN YOUR GUIDE TO PRODUCT EXCELLENCE 4

5 Starter «««««ANZ Smart Choice Super O 10 O P Unlimited O P P 50 N/A AustralianSuper Personal Super Plan P 17 P P Unlimited P P O 78 N/A First State Personal Super O 12 O P 1 P P O % ING - Living Super P 10 P P Unlimited P P O N/A.50% capped at $1000 Local Government Super Accumulation Scheme O 11 O P Nil P P O N/A REST Personal Super O 13 O P Unlimited P P O N/A 0.10% StatewideSuper Personal Plan O 10 O P 1 P P O % Sunsuper for life O 20 O P Unlimited P P O % ««««AMP Flexible Super Core O 2 O P Unlimited P P O N/A AMP Flexible Super Choice P 93 O P Unlimited P P O N/A AMP Flexible Super Select O 7 O P Unlimited P P O N/A Auscoal Superannuation Fund P 10 O P Unlimited P P O % AMIST Personal Super O 6 O P Unlimited P P O % Energy Super O 9 O P 1 P P P % SUPERANNUATION STAR RATINGS PAGE 1

6 Starter First Super Personal Division O 5 O P 2 P P O 70.2 N/A HESTA Personal Super O 11 O P Unlimited P P O % HOSTPLUS Personal Super O 19 O P Nil P P O 78 N/A Kinetic Superannuation O 8 O P Nil P P O % LUCRF Super Personal Plan O 10 O P Nil P P O 78 N/A NGS Super Personal Plan O 12 O P 1 P P O % Australian Catholic Superannuation O 11 O P Nil P P O % VicSuper Beneficiary Account P 9 O P Unlimited P P O 78.28% capped at $1422 «««Aon Master Trust Personal Super Essentials O 32 O P Unlimited P P O % Asgard Elements Personal Super P 106 O P Unlimited P P O N/A 1.30% Austsafe Super Industry O 10 O P Unlimited P P O % AV Super Public Offer Plan O 7 O P Unlimited P P O % BT Super for Life O 5 O P Unlimited P P P 60 N/A BT Lifetime Personal Super O 24 O P Unlimited O P O N/A 0.27% BussQ Premium Choice Super O 11 O P Unlimited P P O 78 N/A CareSuper Personal Plan P 12 P P Unlimited P P O % SUPERANNUATION STAR RATINGS PAGE 2

7 Starter Christian Personal Super O 5 O P Unlimited P P O % Colonial First State FirstChoice Personal Super P 118 O P Unlimited P P O N/A Built into MER Essentials Super O 8 O P Nil O P P 60 N/A CBUS Personal Superannuation O 4 O P Unlimited O P O % Catholic Super Plan O 13 O P Unlimited P P O % Equip Super Personal O 11 O P Unlimited P P O 78.20% capped at $900 APEX Super Fund O 10 O P Unlimited P P O 67.6 N/A dom of Choice Personal Superannuation Plan O 171 P P Unlimited P P O % % Guild Super Personal Plan O 8 O O Unlimited P P O % % IOOF Pursuit - Focus O 11 O P Unlimited P P O % Intrust Super Fund Select Super O 10 O P Unlimited P P O % Legal Super Personal Plan P 11 P P Unlimited P P O % Media Super Personal Superannuation Account O 10 O P Nil P P O % MLC MasterKey Super O 41 O P Unlimited P P O % % MLC MasterKey Super Fundamentals P 52 O P Unlimited P P O % % MTAA Personal Super Plan O 8 O P Unlimited P P O % capped at $533 NSF Super Personal Division O 5 O O 1 P P O % SUPERANNUATION STAR RATINGS PAGE 3

8 Starter OneAnswer Frontier Personal Super P 92 O P Unlimited P P O N/A Perpetual WealthFocus Super Plan O 76 O P Unlimited P P O N/A Built into MER Plum Personal Plan O 18 O P Unlimited P P O % % Prime Super Fund O 9 O O 1 P P O %, nil over $100k Quadrant Personal Super O 11 O P Nil P P O % REI Super Fund O 3 O P Unlimited P P O % Bendigo Smart Start Super O 11 O P Unlimited P P O 98 N/A Suncorp Everyday Super P 1 O P Nil O P P 78 N/A TasPlan Super TasPersonal O 5 O P 1 P P O % % AMG Universal Super Fund P 66 P O Unlimited P P O % % TWU Super O 3 O P Unlimited P P O % Virgin Super Personal Plan - Super Plus O N/A O O Unlimited P P O % - 1% Vison Super Personal Plan O 9 O P Nil P P O 78.18% capped at $540 WALGSP Personal Super Solutions O 11 O P 2 P P O % ««Austchoice Super P 181 P P Unlimited P P O % % Chiefly Super Personal Plan O 11 O P Unlimited P P O 72.8 N/A SUPERANNUATION STAR RATINGS PAGE 4

9 Starter Clearview Superannuation and RollOvers O 7 O P Unlimited O P P N/A Built into MER Pursuit Select Personal Superannuation P 321 P P Unlimited P P O 60.55%-.95 % Nil over 500k Spectrum Personal Superannuation P 149 P P 2 P P O % % MAP Superannuation Plan O 8 O P 4 P P O N/A 0.20% % Mentor Personal Super O 14 O P Unlimited O P O % % Mercer Wealth Solutions Super Trust O 50 O P Unlimited O P O N/A.70%-1.15%,nil over 500k First Quest Retirement Service Superannuation O 138 O P Unlimited P P O N/A 0.25% % Bendigo Superannuation Plan O 49 P P 2 P P P % % Russell SuperSolution Personal Division O 15 O P 5 O P O %-0.70%,nil over 500K «Australian Ethical Personal Superannuation O 7 O P Unlimited P P O % Strategy Personal Plan P 14 P P Unlimited O P O % % Perpetual Select Super Plan O 13 O P Unlimited P P O N/A Arc Master Trust Personal Plan O 11 O P Unlimited P P O N/A 0.45% % SUPERANNUATION STAR RATINGS PAGE 5

10 Nester «««««AMP Flexible Super Choice P 93 O P Unlimited P P O N/A ANZ Smart Choice Super O 10 O P Unlimited O P P 50 N/A AustralianSuper Personal Super Plan P 17 P P Unlimited P P O 78 N/A First State Personal Super O 12 O P 1 P P O % Kinetic Superannuation O 8 O P Nil P P O % Local Government Super Accumulation Scheme O 11 O P Nil P P O N/A StatewideSuper Personal Plan O 10 O P 1 P P O % ««««AMP Flexible Super Core O 2 O P Unlimited P P O N/A AMP Flexible Super Select O 7 O P Unlimited P P O N/A BussQ Premium Choice Super O 11 O P Unlimited P P O 78 N/A Energy Super O 9 O P 1 P P P % First Super Personal Division O 5 O P 2 P P O 70.2 N/A HESTA Personal Super O 11 O P Unlimited P P O % HOSTPLUS Personal Super O 19 O P Nil P P O 78 N/A SUPERANNUATION STAR RATINGS PAGE 6

11 Nester ING - Living Super P 10 P P Unlimited P P O N/A.50% capped at $1000 LUCRF Super Personal Plan O 10 O P Nil P P O 78 N/A NGS Super Personal Plan O 12 O P 1 P P O % REI Super Fund O 3 O P Unlimited P P O % Bendigo Smart Start Super O 11 O P Unlimited P P O 98 N/A Australian Catholic Superannuation O 11 O P Nil P P O % Sunsuper for life O 20 O P Unlimited P P O % VicSuper Beneficiary Account P 9 O P Unlimited P P O 78.28% capped at $1422 «««Aon Master Trust Personal Super Essentials O 32 O P Unlimited P P O % Asgard Elements Personal Super P 106 O P Unlimited P P O N/A 1.30% Auscoal Superannuation Fund P 10 O P Unlimited P P O % Austsafe Super Industry O 10 O P Unlimited P P O % Austchoice Super P 181 P P Unlimited P P O % % AMIST Personal Super O 6 O P Unlimited P P O % AV Super Public Offer Plan O 7 O P Unlimited P P O % BT Super for Life O 5 O P Unlimited P P P 60 N/A SUPERANNUATION STAR RATINGS PAGE 7

12 Nester BT Lifetime Personal Super O 24 O P Unlimited O P O N/A 0.27% CareSuper Personal Plan P 12 P P Unlimited P P O % Christian Personal Super O 5 O P Unlimited P P O % Colonial First State FirstChoice Personal Super P 118 O P Unlimited P P O N/A Built into MER Essentials Super O 8 O P Nil O P P 60 N/A CBUS Personal Superannuation O 4 O P Unlimited O P O % Catholic Super Plan O 13 O P Unlimited P P O % Equip Super Personal O 11 O P Unlimited P P O 78.20% capped at $900 APEX Super Fund O 10 O P Unlimited P P O 67.6 N/A Guild Super Personal Plan O 8 O O Unlimited P P O % % Pursuit Select Personal Superannuation P 321 P P Unlimited P P O 60.55%-.95 % Nil over 500k IOOF Pursuit - Focus O 11 O P Unlimited P P O % Intrust Super Fund Select Super O 10 O P Unlimited P P O % Legal Super Personal Plan P 11 P P Unlimited P P O % Media Super Personal Superannuation Account O 10 O P Nil P P O % MLC MasterKey Super O 41 O P Unlimited P P O % % MLC MasterKey Super Fundamentals P 52 O P Unlimited P P O % % SUPERANNUATION STAR RATINGS PAGE 8

13 Nester MTAA Personal Super Plan O 8 O P Unlimited P P O % capped at $533 NSF Super Personal Division O 5 O O 1 P P O % OneAnswer Frontier Personal Super P 92 O P Unlimited P P O N/A Perpetual WealthFocus Super Plan O 76 O P Unlimited P P O N/A Built into MER Prime Super Fund O 9 O O 1 P P O %, nil over $100k Quadrant Personal Super O 11 O P Nil P P O % REST Personal Super O 13 O P Unlimited P P O N/A 0.10% Suncorp Everyday Super P 1 O P Nil O P P 78 N/A TasPlan Super TasPersonal O 5 O P 1 P P O % % AMG Universal Super Fund P 66 P O Unlimited P P O % % TWU Super O 3 O P Unlimited P P O % Vison Super Personal Plan O 9 O P Nil P P O 78.18% capped at $540 WALGSP Personal Super Solutions O 11 O P 2 P P O % ««Chiefly Super Personal Plan O 11 O P Unlimited P P O 72.8 N/A dom of Choice Personal Superannuation Plan O 171 P P Unlimited P P O % % Spectrum Personal Superannuation P 149 P P 2 P P O % % SUPERANNUATION STAR RATINGS PAGE 9

14 Nester MAP Superannuation Plan O 8 O P 4 P P O N/A 0.20% % Mentor Personal Super O 14 O P Unlimited O P O % % Mercer Wealth Solutions Super Trust O 50 O P Unlimited O P O N/A.70%-1.15%,nil over 500k First Quest Retirement Service Superannuation O 138 O P Unlimited P P O N/A 0.25% % Perpetual Select Super Plan O 13 O P Unlimited P P O N/A Plum Personal Plan O 18 O P Unlimited P P O % % Bendigo Superannuation Plan O 49 P P 2 P P P % % Russell SuperSolution Personal Division O 15 O P 5 O P O %-0.70%,nil over 500K Virgin Super Personal Plan - Super Plus O N/A O O Unlimited P P O % - 1% «Australian Ethical Personal Superannuation O 7 O P Unlimited P P O % Clearview Superannuation and RollOvers O 7 O P Unlimited O P P N/A Built into MER Strategy Personal Plan P 14 P P Unlimited O P O % % Arc Master Trust Personal Plan O 11 O P Unlimited P P O N/A 0.45% % SUPERANNUATION STAR RATINGS PAGE 10

15 Wealth Accumulator «««««AMP Flexible Super Core O 2 O P Unlimited P P O N/A AMP Flexible Super Choice P 93 O P Unlimited P P O N/A AMP Flexible Super Select O 7 O P Unlimited P P O N/A ANZ Smart Choice Super O 10 O P Unlimited O P P 50 N/A AustralianSuper Personal Super Plan P 17 P P Unlimited P P O 78 N/A First State Personal Super O 12 O P 1 P P O % Kinetic Superannuation O 8 O P Nil P P O % Local Government Super Accumulation Scheme O 11 O P Nil P P O N/A StatewideSuper Personal Plan O 10 O P 1 P P O % Sunsuper for life O 20 O P Unlimited P P O % ««««AMIST Personal Super O 6 O P Unlimited P P O % BussQ Premium Choice Super O 11 O P Unlimited P P O 78 N/A Catholic Super Plan O 13 O P Unlimited P P O % Energy Super O 9 O P 1 P P P % SUPERANNUATION STAR RATINGS PAGE 11

16 Wealth Accumulator HOSTPLUS Personal Super O 19 O P Nil P P O 78 N/A ING - Living Super P 10 P P Unlimited P P O N/A.50% capped at $1000 LUCRF Super Personal Plan O 10 O P Nil P P O 78 N/A MLC MasterKey Super Fundamentals P 52 O P Unlimited P P O % % Bendigo Smart Start Super O 11 O P Unlimited P P O 98 N/A Australian Catholic Superannuation O 11 O P Nil P P O % Suncorp Everyday Super P 1 O P Nil O P P 78 N/A VicSuper Beneficiary Account P 9 O P Unlimited P P O 78.28% capped at $1422 «««Aon Master Trust Personal Super Essentials O 32 O P Unlimited P P O % Asgard Elements Personal Super P 106 O P Unlimited P P O N/A 1.30% Auscoal Superannuation Fund P 10 O P Unlimited P P O % Austsafe Super Industry O 10 O P Unlimited P P O % Austchoice Super P 181 P P Unlimited P P O % % AV Super Public Offer Plan O 7 O P Unlimited P P O % BT Super for Life O 5 O P Unlimited P P P 60 N/A BT Lifetime Personal Super O 24 O P Unlimited O P O N/A 0.27% SUPERANNUATION STAR RATINGS PAGE 12

17 Wealth Accumulator CareSuper Personal Plan P 12 P P Unlimited P P O % Chiefly Super Personal Plan O 11 O P Unlimited P P O 72.8 N/A Christian Personal Super O 5 O P Unlimited P P O % Colonial First State FirstChoice Personal Super P 118 O P Unlimited P P O N/A Built into MER Essentials Super O 8 O P Nil O P P 60 N/A CBUS Personal Superannuation O 4 O P Unlimited O P O % Equip Super Personal O 11 O P Unlimited P P O 78.20% capped at $900 First Super Personal Division O 5 O P 2 P P O 70.2 N/A Guild Super Personal Plan O 8 O O Unlimited P P O % % HESTA Personal Super O 11 O P Unlimited P P O % Pursuit Select Personal Superannuation P 321 P P Unlimited P P O 60.55%-.95 % Nil over 500k IOOF Pursuit - Focus O 11 O P Unlimited P P O % Intrust Super Fund Select Super O 10 O P Unlimited P P O % Legal Super Personal Plan P 11 P P Unlimited P P O % Media Super Personal Superannuation Account O 10 O P Nil P P O % MLC MasterKey Super O 41 O P Unlimited P P O % % MTAA Personal Super Plan O 8 O P Unlimited P P O % capped at $533 SUPERANNUATION STAR RATINGS PAGE 13

18 Wealth Accumulator NGS Super Personal Plan O 12 O P 1 P P O % NSF Super Personal Division O 5 O P 1 P P O % OneAnswer Frontier Personal Super P 92 O P Unlimited P P O N/A Perpetual WealthFocus Super Plan O 76 O P Unlimited P P O N/A Built into MER Prime Super Fund O 9 O O 1 P P O %, nil over $100k Quadrant Personal Super O 11 O P Nil P P O % REI Super Fund O 3 O P Unlimited P P O % REST Personal Super O 13 O P Unlimited P P O N/A 0.10% Bendigo Superannuation Plan O 49 P P 2 P P P % % TasPlan Super TasPersonal O 5 O P 1 P P O % % TWU Super O 3 O P Unlimited P P O % Vison Super Personal Plan O 9 O O Nil P P O 78.18% capped at $540 WALGSP Personal Super Solutions O 11 O P 2 P P O % ««Clearview Superannuation and RollOvers O 7 O P Unlimited O P P N/A Built into MER APEX Super Fund O 10 O P Unlimited P P O 67.6 N/A dom of Choice Personal Superannuation Plan O 171 P P Unlimited P P O % % SUPERANNUATION STAR RATINGS PAGE 14

19 Wealth Accumulator Spectrum Personal Superannuation P 149 P P 2 P P O % % MAP Superannuation Plan O 8 O P 4 P P O N/A 0.20% % Mercer Wealth Solutions Super Trust O 50 O P Unlimited O P O N/A.70%-1.15%,nil over 500k First Quest Retirement Service Superannuation O 138 O P Unlimited P P O N/A 0.25% % Strategy Personal Plan P 14 P P Unlimited O P O % % Perpetual Select Super Plan O 13 O P Unlimited P P O N/A Plum Personal Plan O 18 O P Unlimited P P O % % Russell SuperSolution Personal Division O 15 O P 5 O P O %-0.70%,nil over 500K AMG Universal Super Fund P 66 P O Unlimited P P O % % Virgin Super Personal Plan - Super Plus O N/A O O Unlimited P P O % - 1% «Australian Ethical Personal Superannuation O 7 O P Unlimited P P O % Mentor Personal Super O 14 O P Unlimited O P O % % Arc Master Trust Personal Plan O 11 O P Unlimited P P O N/A 0.45% % SUPERANNUATION STAR RATINGS PAGE 15

20 Pre-Retiree «««««AMP Flexible Super Core O 2 O P Unlimited P P O N/A AMP Flexible Super Choice P 93 O P Unlimited P P O N/A AMP Flexible Super Select O 7 O P Unlimited P P O N/A ANZ Smart Choice Super O 10 O P Unlimited O P P 50 N/A AMIST Personal Super O 6 O P Unlimited P P O % AustralianSuper Personal Super Plan P 17 P P Unlimited P P O 78 N/A MLC MasterKey Super Fundamentals P 52 O P Unlimited P P O % % Bendigo Smart Start Super O 11 O P Unlimited P P O 98 N/A ««««AV Super Public Offer Plan O 7 O P Unlimited P P O % BT Super for Life O 5 O P Unlimited P P P 60 N/A Christian Personal Super O 5 O P Unlimited P P O % Colonial First State FirstChoice Personal Super P 118 O P Unlimited P P O N/A Built into MER Essentials Super O 8 O P Nil O P P 60 N/A First State Personal Super O 12 O P 1 P P O % SUPERANNUATION STAR RATINGS PAGE 16

21 Pre-Retiree HOSTPLUS Personal Super O 19 O P Nil P P O 78 N/A ING - Living Super P 10 P P Unlimited P P O N/A.50% capped at $1000 Pursuit Select Personal Superannuation P 321 P P Unlimited P P O 60.55%-.95 % Nil over 500k IOOF Pursuit - Focus O 11 O P Unlimited P P O % Kinetic Superannuation O 8 O P Nil P P O % Local Government Super Accumulation Scheme O 11 O P Nil P P O N/A StatewideSuper Personal Plan O 10 O P 1 P P O % Sunsuper for life O 20 O P Unlimited P P O % VicSuper Beneficiary Account P 9 O P Unlimited P P O 78.28% capped at $1422 «««Aon Master Trust Personal Super Essentials O 32 O P Unlimited P P O % Asgard Elements Personal Super P 106 O P Unlimited P P O N/A 1.30% Auscoal Superannuation Fund P 10 O P Unlimited P P O % Austsafe Super Industry O 10 O P Unlimited P P O % Austchoice Super P 181 P P Unlimited P P O % % BT Lifetime Personal Super O 24 O P Unlimited O P O N/A 0.27% BussQ Premium Choice Super O 11 O P Unlimited P P O 78 N/A SUPERANNUATION STAR RATINGS PAGE 17

22 Pre-Retiree CareSuper Personal Plan P 12 P P Unlimited P P O % Chiefly Super Personal Plan O 11 O P Unlimited P P O 72.8 N/A Clearview Superannuation and RollOvers O 7 O P Unlimited O P P N/A Built into MER CBUS Personal Superannuation O 4 O P Unlimited O P O % Catholic Super Plan O 13 O P Unlimited P P O % Energy Super O 9 O P 1 P P P % Equip Super Personal O 11 O P Unlimited P P O 78.20% capped at $900 First Super Personal Division O 5 O P 2 P P O 70.2 N/A Guild Super Personal Plan O 8 O O Unlimited P P O % % HESTA Personal Super O 11 O P Unlimited P P O % Spectrum Personal Superannuation P 149 P P 2 P P O % % Intrust Super Fund Select Super O 10 O P Unlimited P P O % Legal Super Personal Plan P 11 P P Unlimited P P O % LUCRF Super Personal Plan O 10 O P Nil P P O 78 N/A Media Super Personal Superannuation Account O 10 O P Nil P P O % Mercer Wealth Solutions Super Trust O 50 O P Unlimited O P O N/A.70%-1.15%,nil over 500k MLC MasterKey Super O 41 O P Unlimited P P O % % SUPERANNUATION STAR RATINGS PAGE 18

23 Pre-Retiree MTAA Personal Super Plan O 8 O P Unlimited P P O % capped at $533 NGS Super Personal Plan O 12 O P 1 P P O % OneAnswer Frontier Personal Super P 92 O P Unlimited P P O N/A Perpetual WealthFocus Super Plan O 76 O P Unlimited P P O N/A Built into MER Perpetual Select Super Plan O 13 O P Unlimited P P O N/A Quadrant Personal Super O 11 O P Nil P P O % REI Super Fund O 3 O P Unlimited P P O % REST Personal Super O 13 O P Unlimited P P O N/A 0.10% Bendigo Superannuation Plan O 49 P P 2 P P P % % Australian Catholic Superannuation O 11 O P Nil P P O % Suncorp Everyday Super P 1 O P Nil O P P 78 N/A TasPlan Super TasPersonal O 5 O P 1 P P O % % TWU Super O 3 O P Unlimited P P O % Vison Super Personal Plan O 9 O P Nil P P O 78.18% capped at $540 ««APEX Super Fund O 10 O P Unlimited P P O 67.6 N/A dom of Choice Personal Superannuation Plan O 171 P P Unlimited P P O % % SUPERANNUATION STAR RATINGS PAGE 19

Pre-Retiree MAP Superannuation Plan O 8 O P 4 P P O N/A 0.20% - 1.60% First Quest Retirement Service Superannuation O 138 O P Unlimited P P O N/A 0.25% - 0.

24 Pre-Retiree MAP Superannuation Plan O 8 O P 4 P P O N/A 0.20% % First Quest Retirement Service Superannuation O 138 O P Unlimited P P O N/A 0.25% % NSF Super Personal Division O 5 O O 1 P P O % Strategy Personal Plan P 14 P P Unlimited O P O % % Plum Personal Plan O 18 O P Unlimited P P O % % Prime Super Fund O 9 O O 1 P P O %, nil over $100k Russell SuperSolution Personal Division O 15 O P 5 O P O %-0.70%,nil over 500K AMG Universal Super Fund P 66 P O Unlimited P P O % % Virgin Super Personal Plan - Super Plus O N/A O O Unlimited P P O % - 1% WALGSP Personal Super Solutions O 11 O P 2 P P O % «Australian Ethical Personal Superannuation O 7 O P Unlimited P P O % Mentor Personal Super O 14 O P Unlimited O P O % % Arc Master Trust Personal Plan O 11 O P Unlimited P P O N/A 0.45% % SUPERANNUATION STAR RATINGS PAGE 20

METHODOLOGY SUPERANNUATION RATINGS There are more than 350 super funds in the market which are classified as personal super, corporate super, SMSF products, public sector super,

The customer may be required to be employed by a particular government department or a large corporation or you may have to see a financial planner first.

We have analysed 76 super funds that are for personal super investment to everyone that are directly for individuals to purchase without intermediary (e.g.

following retirement. We have not credit rated the super fund managers.

25 METHODOLOGY SUPERANNUATION RATINGS There are more than 350 super funds in the market which are classified as personal super, corporate super, SMSF products, public sector super, wrap/platform accounts, industry funds, retail funds, master trusts etc. Many of these funds are not directly to the average person. The customer may be required to be employed by a particular government department or a large corporation or you may have to see a financial planner first. Therefore we have limited our superannuation star ratings to funds that are to the average person i.e. anyone can apply directly to the fund. We have analysed 76 super funds that are for personal super investment to everyone that are directly for individuals to purchase without intermediary (e.g. planner) We have excluded any SMSF/Corporate super accounts We have focused on the accumulation stage, when funds are being contributed to superannuation, not the drawdown stage following retirement. We have not credit rated the super fund managers. Profile Descriptions For our analysis we have used 4 profiles that reflect the usual superannuation saving stages and have calculated the value of the superannuation funds to each profile. Starter New to work, early working years Low super balance, not concerned about too many investment options, low fees are important Nester Building wealth, building for future Start to have a decent super amount, with priority on nonsuper investment. Minimum contribution to super and looking for long term growth Wealth Accumulator More money to play with, peak earnings period Have accumulated significant amount of super and looking for more advanced options to accelerate growth Pre-Retiree roaching retirement Large balance with conservative approach towards retirement investment YOUR GUIDE TO PRODUCT EXCELLENCE 1

CANSTAR Star Ratings The results are reflected in a consumer-friendly 5-star concept, with 5 stars denoting products that offer outstanding value.

26 CANSTAR Star Ratings The results are reflected in a consumer-friendly 5-star concept, with 5 stars denoting products that offer outstanding value. Pricing Score (50-80)% Total Cost (Management fee, fee, fee MER, Performance Fee, Cost) Feature Score (20-50)% Total Feature (Based on 6 different feature categories) Indexed Score Product with the best pricing or features will receive a full score Price Feature Profile Starter 80% 20% Nester 70% 30% Wealth Accumulator 60% 40% Pre-Retiree 50% 50% Pricing Score Based on the average super balance (taking into account Administration/Management fee, fee, fee/mer, Performance fee and insurance costs), 500 scenarios per profile were built around a normal distribution and a total cost to the consumer calculated. We have not included contribution fee in our calculations. If purchasing directly the consumer should enquire if the fund will waive or reduce these fees prior to joining. Profile Name Cover (Death &TPD) Average Super Balance Super Balance ($) Low High Starter $50,000 $25,000 $10,000 $40,000 Nester $200,000 $80,000 $60,000 $100,000 Wealth Accumulator $200,000 $140,000 $120,000 $160,000 Pre-Retiree $100,000 $160,000 $140,000 $180,000 YOUR GUIDE TO PRODUCT EXCELLENCE 2

27 Total Cost Fee + Administration Fee + Fee + Performance Fee + Cost How much it costs to be a member of the super fund How much it costs to pay the fund for managing your super balance usually its tiered How much you have to pay to your investment manager(s) MER Depends on the investment option chosen How much you have to pay your investment manager(s) for exceeding the target performance Quotes based on a non-smoker/white collar/male for the sum insured mentioned in the table above Feature Score Each individual feature is categorised into six different categories and is allocated points. The total points received in each category are then weighted against the weights provided in the table below. The weighted scores are summed to arrive at the total feature score which is indexed against the highest feature score in each profile to arrive at the feature score for each product. Category Starter Nester Wealth Pre- Accumulator Retiree Access 10% 5% 5% 5% Account set-up 15% 15% 15% 15% Contribution method 15% 15% 15% 15% Access 40% 40% 40% 40% Phone Access 30% 30% 30% 30% Fees and charges 10% 5% 10% 15% Options 25% 25% 25% 20% Managed 70% 70% 70% 70% Listed Securities 20% 20% 20% 20% 10% 10% 10% 10% 25% 30% 15% 10% & Strategy 20% 25% 35% 40% Additional features/benefits 10% 10% 10% 10% Other features 10% 20% 20% 20% Tools/Education 90% 80% 80% 80% YOUR GUIDE TO PRODUCT EXCELLENCE 3

28 Additional rules applied to Star Ratings: Strategy During a credit crunch, funds that hold a large proportion of investments in illiquid assets (assets not readily converted to cash) tend to come under pressure to meet member redemptions. Some funds had to suspend withdrawals and have subsequently closed particular investment options to new members. This highlighted the risks associated with having a significant percentage of funds invested in illiquid assets. With this in mind CANSTAR analysed each of the funds default investment strategies to ensure there were not large holdings in illiquid or unlisted assets which might signal a potential liquidity risk. If fund had more than 35% invested in direct or unlisted property, infrastructure, private equity or alternative assets we investigated further. We undertook the following steps to understand the investment strategy further: Reviewed the Product Disclosure Statement Examined the fund annual report for details of the fund investments Made enquiries to fund call centres Reviewed utilisation of external fund managers and diversification of fund s management If, after these enquiries, the research committee remained concerned at the liquidity of the fund s investments, it was penalised 2 stars. Performance CANSTAR investment ratings are based on value delivered to the consumer i.e. the features, functionality, flexibility and other benefits the investor receives, relative to the fees and other costs incurred. In respect of superannuation there are some particular elements captured range of investment options, access to advice and investment performance. Treatment of investment options and advice has already been outlined in this document and weightings are applied relative to the consumer profile. performance is incorporated into the rating in order to identify and recognize funds which have either outperformed or underperformed consistently over a five year period. It is treated as an adjustment at the end of the calculations. We do this, as in other respects we measure known elements of the value proposition, while we cannot assure an accurate prediction of future investment performance based on past performance. We want our rating to be dominated by clear knowns, and the research reveals a lack of persistence of investment outperformance. We consider the year on year performance over a five year period as reported by APRA. The APRA published Rate of Returns measures the combined earnings of a superannuation fund s assets across all its products and investment options. which sit within the top quartile of the four star rating band, and which also show reported top quartile investment performance for four out of the five years receive an additional star in their rating. Conversely, funds which have fallen in the bottom quartile performance band in four out of the five year period are only eligible to receive a maximum rating of three-stars. This action is taken as persistent underperformance can be an indicator of broader management or systematic issues which may be impacting the investment performance. How are the stars awarded? The total score received for each profile ranks the products. The stars are then awarded based on the distribution of the scores according to the following guidelines. As you can see, only the products that obtain a score in the top 10% of the of the score distribution receive a 5 star rating. YOUR GUIDE TO PRODUCT EXCELLENCE 4

The results are reflected in a consumer-friendly 5-star concept, with 5 stars denoting an outstanding product. How often are products reviewed for star ratings purposes?

29 The results are reflected in a consumer-friendly 5-star concept, with 5 stars denoting an outstanding product. How often are products reviewed for star ratings purposes? All ratings are fully recalulated every twelve months. CANSTAR also monitors changes on an ongoing basis. Does CANSTAR rate other product areas? CANSTAR researches, compares and rates the suite of banking and insurance products listed below. These star ratings use similar methodologies to guarantee quality, consistency and transparency. Results are freely to consumers who use the star ratings as a guide to product excellence. The use of similar star ratings logos also builds consumer recognition of quality products across all categories. Please access the CANSTAR website at if you would like to view the latest star ratings reports of interest. Account Based Pensions Agribusiness Business banking Business life insurance Car insurance Credit cards Deposit accounts Direct life insurance Health insurance Home & Contents Home loans Life Managed s Margin lending Banking Share Trading Package banking Personal loans Superannuation Travel DISCLAIMER: To the extent that any CANSTAR data, ratings or commentary constitutes general advice, this advice has been prepared by CANSTAR Research Pty Ltd ABN AFSL and does not take into account your individual investment objectives, financial circumstances or needs. Information provided does not constitute financial, taxation or other professional advice and should not be relied upon as such. CANSTAR recommends that, before you make any financial decision, you seek professional advice from a suitably qualified adviser. A Product Disclosure Statement relating to the product should also be obtained and considered before making any decision about whether to acquire the product. CANSTAR acknowledges that past performance is not a reliable indicator of future performance. Please refer to CANSTAR Research s FSG for more information at All information contained herein shall not be copied or otherwise reproduced, repackaged, further transmitted, transferred, disseminated, redistributed or resold, or stored for subsequent use for any purpose, in whole or in part, in any form or manner or by means whatsoever, by any person without CANSTAR s prior consent. All information obtained by CANSTAR from external sources is believed to be accurate and reliable. Under no circumstances shall CANSTAR have any liability to any person or entity due to error (negligence or otherwise) or other circumstances or contingency within or outside the control of CANSTAR or any of its directors, officers, employees or agents in connection with the procurement, collection, compilation, analysis, interpretation, communication, publication, or delivery of any such information. Copyright 2012 CANSTAR Pty Ltd ABN YOUR GUIDE TO PRODUCT EXCELLENCE 5

This report is no longer current. Please refer to the CANSTAR website for the most recent star ratings report on this topic

This report is no longer current. Please refer to the CANSTAR website for the most recent star ratings report on this topic Report No. 2 September 2011 DISCLAIMER To the extent that any CANSTAR CANNEX