Investment
performance |
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All Active Super Lifestage options outperformed their 10-year performance objectives.
The Active Super Lifestage Product passed the APRA performance test.
The Active Super Lifestage Product investment options performed in the 3rd and 4th quartile for the year, with 1st and 2nd quartile rankings for longer time periods. |
| Fees and costs |
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As we have an active investment management approach applied to all investment options, as well as a more comprehensive service offering for members, our total fees are higher than the industry median.
However, Active Super’s administration fees are lower than the All Fund Median based on a $50,000 balance. The investment costs are more expensive due to our active approach, and when added to administration fees lower our ranking to fall into the bottom quartile (more expensive).
We are actively working to improve our economies of scale and reduce fees and costs.
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| Insurance |
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Active Super offers low cost default insurance cover that is adjusted for age and gender, and also offers the opportunity for individual members to adjust their insurance to better meet their own needs.
In addition, we have significantly lower insurance premiums when compared to the industry standard to ensure super balances are not unnecessarily eroded.
The amount of cover provided is higher at younger ages when compared to the industry median, and near to the average sums insured of the industry median over the age of 45.
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| Options, benefits and facilities |
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We place a high emphasis on providing access to excellent personalised member service which is delivered through a comprehensive range of channels.
Our Australian contact centre offers voice and various non-voice options. We also have offices throughout NSW (Sydney, Newcastle, Wollongong, Parramatta, Tamworth, Wagga Wagga, Orange & Ballina) offering face to face appointments with client relationship managers and IFS financial planners, who support both members and employers.
In addition, we offer digital onboarding and member engagement through an online portal and a comprehensive native member app.
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| Operating costs and scale |
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Overall, we deliver equitable operating cost outcomes for members.
We deliver a range of valued services to a membership needing to be serviced across a wide geographical area.
Our operating costs are above industry medians and we are actively exploring options to reduce our costs and improve our economies of scale.
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Product summary
The Active Super Lifestage Product, is our default product.
- The Active Super Lifestage Product is based on the anticipated investment needs and objectives of members by age group.
- A member’s investment is automatically moved to lower risk options as the member gets older.
- By investing in this way, younger members are invested in riskier investments with higher potential growth, while older members are progressively ‘de-risked’ over time, reducing their exposure to investment market volatility.
- The following diagram shows each investment option’s exposure to growth assets. A higher exposure has a higher risk rating, with the potential for a higher investment return.
Active Super believes the Lifestages options are promoting the financial interests of members by protecting and growing members’ money for retirement with positive returns.
Investment performance compared to investment objectives
| Option name |
Investment objective (Benchmark+) |
Rolling 10 year return p.a.* |
Objective met? |
| Accelerator (High Growth) |
3.5% net investment return per annum above CPI, measured over a rolling 10-year period. |
8.73% |
Yes |
| Accumulator (Balanced) |
3.0% net investment return per annum above CPI, measured over a rolling 10-year period. |
7.33% |
Yes |
| Appreciator (Conservative Balanced) |
2.0% net investment return per annum above CPI, measured over a rolling 10-year period. |
5.63% |
Yes |
*Source: Australian Bureau of Statistics, SuperRatings Pty Ltd – Fund Crediting Rate Survey 30 June 2023. (SuperRatings returns are calculated net of investment fees, tax and implicit asset-based administration fees. Explicit fees such as fixed dollar administration fees, contribution fees and switching fees are excluded.)
+The 10 year annualised CPI is 2.66%. Source: Australian Bureau of Statistics.
All options exceeded their stated performance objective, with Accelerator exceeding it by 2.56%, Accumulator by 1.66% and Appreciator by 0.96%.
APRA Performance Test outcome
APRA’s Performance Test assesses the past performance of accumulation product investment options.
APRA calculates a Performance Test assessment metric for each investment option, based on two components:
- an investment return component, which compares:
- the actual return for the option over nine years, with
- a benchmark return derived by APRA for that option based on the option’s strategic asset allocation and a range of market indices; and
- an administration fees component, which compares:
- representative administration fees and expenses (RAFE) for the option, based on fees over the latest year for a member with an account balance of $50,000, with
- a benchmark RAFE (BRAFE) calculated by APRA as the median RAFE for all similar options.
The assessment metric is calculated as the investment return component (actual return minus the benchmark return), minus the administration fees component (RAFE minus the BRAFE). An investment option passes the Performance Test if the assessment metric is greater than zero or within 0.05% of zero.
The Active Super Lifestage Product passed the performance test, as shown below:
Source: APRA, see www.apra.gov.au/annual-superannuation-performance-test
Investment returns compared to the industry median
Accelerator (High Growth) underperformed against the one-year industry median with a return of 9.38%. The one-year Industry Median was 11.6% for options with similar asset allocation. However, over the long term (10 Years), Accelerator outperformed the industry median.
Source: SuperRatings data as at 30 June 2023.
Accumulator underperformed against the one-year industry median with a return of 7.48%. The one-year Industry Median was 9.26% for options with similar asset allocation. Over the long term (10 years), Accumulator has aligned with the industry median.
Source: SuperRatings data as at 30 June 2023.
Appreciator underperformed against the industry median with a return of 5.60%. The Industry Median was 6.86% for options with similar asset allocation. Over the long term (10 years), Appreciator has aligned with the industry median.
Source: SuperRatings data as at 30 June 2023.
- We are a ‘Profit to Members Fund’, with the fees and costs charged on a cost recovery basis.
- Our fees reflect the active investment management approach applied to all our investment options, as well as the high levels of service and support we offer members (see Options, benefits and facilities section). However, we’re always looking for ways to reduce fees across the board.
- As part of our commitment to transparency, we also break down our fees on member statements so you can see exactly what each fee is for:
- Administration fees: are based on the forecast costs of running the fund (including legislative updates and required enhancements)
- Investment costs: are charged on a cost recovery structure to exercise care and expertise in managing your retirement savings.
Cost of Fund compared to Industry median
The MySuper ‘Cost of Fund’ is higher than our peers.
This year the regulators (APRA) replaced the APRA Heatmap with an expanded Performance Test. This report introduced RAFE which is the Representative Administration Fees and Expenses of each fund, and BRAFE which is the Benchmark Representative Administration Fees and Expenses. The BRAFE applied is the All Fund Median.
The MySuper BRAFE across the industry is 0.26181%, whereas Active Super's MySuper RAFE is 0.35224%, showing that Active Super’s MySuper RAFE is 0.09% higher than the All Fund MySuper BRAFE (Benchmark).
Active Super is ranked 44th out of 62 MySuper funds.
Basic insurance cover is provided automatically to eligible members when they join the Active Super Accumulation Scheme (eligible members are age 25 or over and have a balance of more than $6,000 in their account, or complete an opt in early form). No medical examinations are required.
Active Super has adopted a lifestage insurance offering to suit the majority of members’ particular needs within various life stages. This design caters for each age demographic and their general insurance needs. Active Super believes this aligns well with the needs of members and is in their best interests.
Overall the insurance design is suitable and appropriate.
The table below shows the level of Basic insurance cover for various age brackets.
Lifestage insurance
Active Super insurance premiums are significantly lower than the industry standard
Our intention is to provide Active Super members with Basic insurance cover at a competitive cost at every stage of life. The following graph shows that our Basic insurance premiums are generally less than half the industry standard, with the average premium being 0.3% of salary for the FY23.
Source: Active Super, estimated average salary per age bracket (gender based), vs premiums.
Amount of MySuper Default Cover against industry
Source: SuperRatings
Source: SuperRatings
Active Super is delivering valued service and support outcomes for members. We are committed to building on our heritage of delivering personalised services to our members within the channel(s) they wish to engage with us. From our Australian in-house contact centre, offices throughout NSW, web chat services, email, enhanced digital welcome experience, worksite pre-retirement seminars, financial planning services, native member app and member online portal.
Overall, Active Super considers the services and benefits aligned to members’ needs and financial interests.
Options
Active Super offers MySuper and Choice superannuation options along with transition to retirement (TTR), account-based pension products, and guaranteed income options for members who want guaranteed income later in life.
The Superannuation, TTR and pension products maintain 5 investment options (along with the additional Lifestage MySuper option in superannuation), covering different asset allocation and risk classes. This allows members to select the most appropriate option or options to help achieve their financial goals and requirements within their risk profile.
Active Super also provides default Basic insurance within the Superannuation products as well as voluntary Death, TPD and Salary Continuance insurance cover.
Benefits
Active Super Booster: launched in May 2022, Super Booster allows members to give their super a boost with contributions paid for by the partner retailers.
The program has been updated to include over 650 brands including many well-recognised retailers such as BWS, Bing Lee, Cotton On, Bonds, Pizza Hut and the Iconic.
Facilities
Member Care centre: the Member Care centre is located in the head office in Sydney with the team providing service via web chat and WhatsApp in addition to servicing members with general advice over the phone.
Financial planners: the arrangement with Industry Fund Services Pty Limited provides access to a dedicated Financial Planning team which is located in both regional and CBD Sydney offices to increase accessibility for members, and to help members achieve their objectives, taking into consideration their financial situations and needs.
Education tools:
- Education seminars: Client Relationship Managers (CRMs)s and financial planners have conducted a total of 135 seminars – both webinars and in person. There was a high level of take up with 2,863 attendees.
- Calculators: Active Super offers a range of calculators to support members with their needs including a Retirement Lifestyle Calculator; a Retirement Projection Calculator; and an Insurance Needs and Costs Calculator.
New member welcome journeys: In October 2022, a welcome journey was launched for new members. The aim of this is to encourage new members to interact with their super when they’re at their most engaged.
Members are prompted to consider steps that could lead to better outcomes over the long-term, including:
- Learning about making additional contributions through salary sacrifice; personal, government and spouse contributions; as well as Active Super Booster
- Considering making a binding death benefit nomination
- Consolidating their super to minimise paying multiple fees
- Downloading the Active Super app and also a copy of their digital member card so they always have their member number handy.
Pre-Retirement seminars : In FY23, 10 seminars were held in a pilot program with 333 attendees. In-house seminars will be held at the majority of employer locations in the 2024 calendar year. Webinars have been held and will continue, in support of the in-person format.
Operating Costs
Active Super is classified as a medium sized fund with approximately 89,000 member accounts and $13.5bn in Funds Under Management (FUM) as at 30 June 2023. We do not return profits or dividends to shareholders, we return them to you, our members.
Active Super’s operating costs are above the average of our peers and many funds within the industry. There has been an increase in the operating costs from FY22 to FY23, largely due to the fund’s continuing investment in technology.
This included:
- upgrades to technology to provide enhanced protection to members’ data - compliant to CPS234 – APRA’s security standard.
- a new standard operating environment was adopted - allowing application and management of better security for internal users.
- an Internal data warehouse was also implemented connecting marketing systems.
We continue to look for ways to reduce operating costs to members and have signed a Memorandum of Understanding with Vision Super for a potential merger. Such a merger would almost double the size of the fund and give us greater resources to provide products, services and benefits, while potentially lowering operating costs and fees for members.
Active Super, at $470.10 cost per member account, sits well above the peer average of $194.68, and the overall superannuation industry average of $222.66
However, Active Super is comparable to the rest of the industry on an operating cost as a percentage of FUM basis.
Operating Expenses as a % of FUM 2022 vs 2023
Source: APRA Fund Level Statistic 30 June 2023 Table 3a column BI: Fund-level financial performance: Funds with a 30 June balance date.
Scale
Investment cost outcomes are largely driven by a combination of investment strategy, investment decisions and scale. Trustee revenue from fees covers Trustee operating cost.
The Trustee has traditionally taken a conservative approach to reserve levels, seeking to maximise the amount of funds retained in members’ accounts and minimising reserve levels, e.g. the Active Super Administration Reserve has been maintained at a low-end level in comparison to peers and the industry.
Larger scale should bring economies of scale from negotiating better contracts with providers such as investment managers to reduce costs for members. To this end, the potential merger with Vision Super is one way in which we can achieve better economies of scale.
Active has a lower staff turnover at 10% than typical industry staff turnover of 15%. This means Active scale is not detrimental to staff retention and satisfaction.
