Member Outcomes Assessment Summary

The Trustee’s products offer a number of options, benefits and facilities to members, including:

• A large investment menu covering a wide range of asset classes;
• Individual tax reporting;
• Flexible pension payment options for those drawing an income stream; and
• Estate planning options that provide certainty.

There are over 1,800 investment options available to MSP members and over 1,200 available to DSP members. These features are supported by a digital platform (i.e. ‘the platform’) where members (assisted by their financial advisers) can manage and monitor their retirement savings.

Industry surveys and research highlight that the Trustee’s products perform well in terms of platform functionality, platform satisfaction and user satisfaction when compared to other superannuation platform providers.¹

The Trustee has determined that the options, benefits and facilities available to members are appropriate for its members and that the fees charged by the Trustee for access to these options, benefits and facilities are commensurate to the features offered and market competitive.

Through each of the Trustee’s products, members can access a variety of investment options from which the member, generally in conjunction with their adviser, can construct a unique portfolio. The Trustee itself does not make investment choices on behalf of members.

The Trustee aims to provide sufficient choice to members so that they can construct a portfolio that suits their individual needs.

The Trustee regularly assesses the investment options available to members within each superannuation or pension product, to ensure members have access to a wide range of quality options. All of the managed funds offered on the investment menu are regularly graded by independent research houses, with 24 per cent of the managed funds offered receiving the highest-grade ratings. Further, independent assurance over the Trustee’s Investment Governance Framework (IGF) was completed in July 2020 and found the IGF to be effective and appropriate.

The Trustee has determined that its investment strategy is appropriate for its beneficiaries. The Trustee has achieved its objective to provide its members with access to a wide choice of investment options to enable the implementation of diversified portfolios, catering to differing member circumstances, investment views and preferences.

As a choice platform provider, the Trustee does not automatically acquire insurance cover for members. Members can choose the type of insurance and level of cover  they require from four external insurers.

Each insurance product offered via the Trustee’s superannuation products is subject to a due diligence process, which assesses the suitability of products and insurers for the Trustee’s members. Once an insurance product is available to members, the Trustee monitors these products and insurers against standards and service levels.  

The Trustee determined that its insurance strategy is appropriate for its beneficiaries and provides members with access to a wide choice of insurance options, giving them the flexibility to tailor their insurance cover (if obtained) to meet their needs.

The Trustee regularly monitors the insurance premiums that are paid from members’ superannuation accounts as a percentage of their account balance. If the Trustee believes that a member’s account balance may be inappropriately eroded due to insurance premiums, the Trustee will write to those members. This correspondence highlights the need for advisers and members to consider the balance between the need to maintain affordable insurance benefits and preserving their retirement income.

When members obtain insurance, the Trustee considers that members and their advisers are in the best position to determine whether the premium payable is appropriate to the member’s individual needs.

The Trustee believes that the scale of its business operations is sufficient so that it:

• can deliver on its business plan objectives and initiatives; and
• does not disadvantage the financial interests of members holding the Trustee’s products.

Continued growth in the number of member accounts and benefits in the MSP enables the Trustee to continue to invest and remain focused on improving member experience and outcomes. A key focus for the Trustee in the year ahead will be to successor fund transfer DSP members to an open product with modern features, subject to relevant assessments, in order to improve outcomes for these DSP members.

Operating costs are paid from the fees that the Trustee earns for acting as trustee of its superannuation funds. The Trustee actively reviews its cost base to instil cost discipline and actively manages operating costs.

The Trustee believes that the operating costs of its business operations are not inappropriately affecting the financial interests of beneficiaries. 

The process for setting administration fees for the Trustee’s products involves extensive analysis. This includes consideration of competitor products and pricing, feedback from existing members and their financial advisers, sustainability of the fund, as well as the cost of developing new products or features. Given this detailed analysis, the Trustee has assessed that its basis for setting fees is appropriate for members.

Following a detailed assessment, the Trustee has determined that, overall, the fees charged to members for its products are:

• industry competitive
• appropriate to its members
• commensurate to the options, benefits and facilities offered to members.

The Trustee has used a comparison tool developed by an external research, data insights and technology company to compare the administration fees2 for its products against a set of competitor products. The competitor products are contemporary choice platform products offered by large, established competitors which provide members with access to a range of investment options and typically require a financial adviser upon application.

For the purposes of this summary, the Trustee has published the median competitor fee. Fees were calculated using actual average balances for members of the Trustee’s superannuation and pension products and average asset allocations for each individual product to reflect actual member experience more accurately.

²Administration fees are calculated net of cash interest.

Fee Comparison – Macquarie Superannuation Plan (Series II Products) 

The Trustee launched a suite of new products (known as ‘Series II products’) in late 2019³. As shown in the table below, the fees for the Series II products are below the peer group median.

Fee Comparison – Macquarie Superannuation Plan (Closed Products)

The Trustee’s older style ‘Series I’ products, which are closed to new members, are less contemporary in the context of the fee structures now available. However, the Trustee has provided advisers with a fee calculator to compare the costs of older style products to Series II products and the ability to seamlessly switch if it is in the member’s best interests. Along with adviser communications, the Trustee has also contacted previously advised clients to inform them of the new products. The Trustee is conducting further analysis on the fees paid by Series I members to determine whether any further actions are required.

Fee Comparison – Definitive Superannuation Plan (Closed Products)

DSP products are closed to new members.

DSP fees in the comparison below are based on the administration fees disclosed in the relevant Product Disclosure Statement (PDS). Due to legislative changes removing the payment of commissions to financial advisers, the actual fees paid by members may be lower than the comparison below.

Note that in assessing the appropriateness of the fees charged to members, the Trustee has not compared or assessed fees relating to specific investment options as these fees are set and retained by the relevant fund manager. Similarly, financial advice fees have not been taken into consideration, as any advice fee charged to a member’s account is agreed between the member and their financial adviser.

The Trustee has assessed the investment risk across all of its superannuation and pension products by reviewing existing investment governance processes, specifically investment limits and market risk stress testing.

To manage the risk of a member losing a significant portion of their balance due to negative market movements and to increase diversification in members’ portfolios, the Trustee:

• applies and monitors investment limits: these are limits placed on the ability to purchase assets and/or asset classes once exposure to that asset and/or asset class has exceeded a specific limit, noting that there are various circumstances where members may move above those limits, including as a result of market movements.
• assesses investment risk through stress testing: this involves identifying accounts with stress test flags to detect those members who are at risk of an inappropriate loss of funds in certain simulated market downturns.

Following this assessment, the Trustee has determined that, given the policies and procedures it has in place, the level of investment risk in its products is appropriate for its members.

The Trustee provides members with a wide choice of quality investment options, enabling members and their advisers to tailor their portfolio to suit their needs and objectives. In providing these options, the Trustee does not make investment choices – these decisions are made by members, generally in conjunction with their financial adviser. This presents limitations in assessing absolute member returns because:

• each member constructs a unique asset portfolio utilising the large investment menu made available by the Trustee, in most cases, with the help of a financial adviser
• portfolios and the returns generated by the investment options in those portfolios are unique to each member
• assessing return data at the fund level for members is not useful as it does not reflect actual member outcomes

Considering the limitations noted above, to assess returns, the Trustee monitors the performance and integrity of the investment options made available to members.

Following this assessment, the Trustee has determined that the returns in its superannuation and pension products are appropriate for its members. The Trustee believes that its Investment Governance Framework and associated processes that monitor the performance of investment options are effective.