Member outcomes assessment

Each year, the trustee of Macquarie Superannuation Plan (MSP), Macquarie Investment Management Limited (the Trustee), is required to assess and compare the quality and competitiveness of its superannuation and pension products.

The Trustee has completed its member outcomes assessment for the MSP for the period 1 April 2023 to 31 March 2024 – this assessment covers the following superannuation and pension products (collectively, ‘the products’): 

1.  Super and Pension Manager II

2. Super and Pension Consolidator II (Engage and Elevate investment menus)

3. Super and Pension Consolidator*, including the following branded products:

a) Vision Super and Pension

4. Super and Pension Manager*, including the following branded products:

a) Premium Portfolio Service Super Account*

b) Premium Portfolio Service Pension Account*

5. Super Accumulator*

6. Term Allocated Pension Manager*

* Note these products are closed to new members.

These products are choice platform products that are only available for members who choose the relevant product. There are no members who default into the products and so there are no MySuper members. 

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

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

There are a broad range of investment options available to MSP 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.

MIML’s ability to attract and retain members demonstrates that the options, benefits, and facilities offered to beneficiaries remain appropriate.

Through each of the products, members can access a variety of investment options (subject to investment limits) from which the member, generally in conjunction with their adviser, can construct a portfolio that is tailored to the member’s needs and objectives. The Trustee itself does not make investment choices on behalf of members.

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 rated by independent research houses.

The Trustee provides 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 of the MSP can choose the type of insurance and level of cover they require from three 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. Once an insurance product is available to members, the Trustee monitors these products and insurers against standards and service levels.

The Trustee has assessed that its insurance strategy is appropriate for its members 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. 

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

The Trustee has assessed that the scale of its business operations is appropriate to promote member’s financial interests and appropriate to deliver on the Trustee’s business plan objectives and initiatives that may not otherwise be available without sufficient scale.

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.

The Trustee has assessed that the operating costs of the Trustee’s business operations are appropriate and sustainable for members. Operating costs are paid from the fees that the Trustee earns for acting as trustee of the MSP and not from the assets of the MSP.

The process for setting administration fees for the 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 Series II products are:

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

For Series I products (closed to new members), administration fees disclosed in the Product Disclosure Statement (PDS) were in the bottom quartile when compared to peers. The Trustee will continue to take appropriate action to promote the financial interests of members that hold these products. Members can easily transfer from Series I to Series II products without opening a new account.

The Trustee has used a comparison tool developed by an external research, data insights and technology company to compare the administration fees disclosed in the relevant PDS for the products against a set of competitor products.

Note: The fees disclosed within the PDS and used within the comparison tool may vary to the actual fees charged to members. For example, the Trustee may exercise discretion not to charge certain fees to members (e.g. regulatory and operating expenses).

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. The competitor products selected for comparison include:

• MyNorth Super and Pension,
• BT Panorama Super,
• CFS Edge Super and Pension
• CFS FirstWrap Plus Super and Pension,
• HUB24 Super,
• IOOF Expand Extra Super and Pension,
• MLC Wrap Super Series 2, and
• Netwealth Super Accelerator.

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

The Trustee regularly assesses the investment risk across all of its products by utilising existing investment governance processes, including investment limits and market risk stress testing.

To mitigate risk and 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, and
• 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 assessed that, given the policies and procedures it has in place, it is appropriately monitoring the level of investment risk in its products.

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, usually with the help of a financial adviser, constructs their own asset portfolio utilising the large investment menu made available by the Trustee,
• portfolios and the returns generated by the investment options in those portfolios are unique to each member, and
• assessing return data at the fund level is not relevant for members 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 products are appropriate.