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AXIS Financial Group

Why Your Employees May Be Losing Out
On Super

All super things considered

The traditional delivery and management of super leaves a lot to be desired – it’s rarely in the best interests of employers and their employees and unfortunately many workplaces are missing out on enjoying the full potential of super as a benefit.

However, it’s difficult for employers to assess their super providers and to accurately determine if they are adding value. Product providers mask their performance, falsify service promises and criticise the competition, making it difficult, if not impossible to distinguish the good from the bad and properly evaluate providers without specialist knowledge and financial advice.

At AXIS Financial Group, we understand the importance of selecting a corporate superannuation plan that will stand the test of time and deliver great value to your workforce year upon year.

As an employer, we can help you optimise your company’s corporate super plan by identifying and assessing opportunities for improvement in these three key areas:

  • Let's talk about the right super fit for your employees.

Employee Benefit Design

  • An employee’s financial package is made up of salary and wages, superannuation and other employee benefits and entitlements. Super contributions is the second largest employer funded employee entitlement and often a missed opportunity to attract, retain and motivate your employees as a workplace benefit

Product Design

  • Traditional super products don’t seek to optimise financial value
  • The prevalent approach is to place most people in the default investment strategy
  • Some providers only offer minimal product functionality, and should not operate, others offer average functionality and require closer scrutiny. Members with high functionality providers often don’t know how to benefit from the product features, and pay higher administration fees
  • Competition reduces and when product providers use the same base design (like MySuper) super becomes less effective for wealth creation

Service Design

  • Traditional superannuation models don’t focus on service delivery, goal setting or wealth creation strategies
  • There’s a lack of personal advice or individualised service

Improving Value

We can help you assess your fund, to help find and design a plan that offers personalised service and great product features, so that your corporate super plan will be viewed as a benefit by employees.

Get in touch

We’re the experts in finding and tailoring products to maximise super as an employer funded employee entitlement. Let us show you how you we’ve helped clients turn super into a superior benefit in the past with this case study:

The Client

  • Chemical manufacturer with a presence in a number of countries, including a large operation in Australia
  • Super plan heavily subsidised and viewed as an attractive benefit by employees
  • AXIS have been managing super as a high value financial benefit for this client for over 15 years.

Significant changes over the years

Over the course of our long relationship with this valued client, we have seen the super landscape change significantly. The need for ongoing legislative attention and adjustments distracts both employers and employees from super as a high value remuneration benefit for retirement. This was true for our client, who was missing out on using super as a superior benefit.

Aspects of their benefit

  • Fund Members 540
  • Funds Under Advice $130,000,000
  • Average Member Balance $240,000
  • Average Salary $115,000
  • Average Employee Age 42

Early on, AXIS assisted in investigating both the regulatory set-up around the client’s corporate superannuation plan and their servicing arrangements with their existing product provider. We reorganised the plan arrangements before transferring to another product provider through successor fund transfer and managed the transition from internal trustees to external trusteeship.

Membership in the previous corporate super plan was high, with only one employee electing choice so the transition required AXIS to win the trust of every employee.

Product Providers Service Models

Product providers don’t promise individual attention to the members of their plans – they prefer to take a one-size fits-all approach.

AXIS operates under their own Australian Financial Services Licence and prefers to see the delivery of personal service at an individual account level. While AXIS has negotiated low administration fees and premiums over the years for this client, the real value delivered is in the personal advice provided face to face. AXIS constructs and recommends investment portfolios, providing personal scaled advice to each employee rather than offering the MySuper Default as the investment solution for all members.

See below the comparable performance between MySuper Default and our recommended portfolios to 30th June 2019:

  MySuper Default High Growth Growth Balanced
1 Year 19.90% 20.40% 16.90% 15.30%
3 Year 9.40% 10.30% 9.50% 9.20%
5 Year 7.90% 9.10% 8.40% 8.30%

Please note that past performance is not a good indicator of future performance and should be used as a guide only. Investment values can go up and down. Investments with more growth style assets may see more fluctuations in value. The returns achieved in the past may not be repeated in the future.

In terms of funds under advice out of default, 82% rest in the AXIS recommended portfolios with the highest proportion in the High Growth and Growth portfolios. Around 60% of the membership are out of default because they want the higher returns or because the level of risk in the MySuper Default option is too high.

What’s the Difference of Plus 1%?

Based on today’s dollars and if our recommended portfolios continue to outperform the MySuper Default by 1%, the average employee with this client (Age 42, Salary $115,000 and Super Balance $240,000) in their corporate super plan, will have an increased income in retirement of just over 20% to the age of 86, with their projected balance increasing from $920,000 to $1,109,000 and the projected income in retirement increasing from $63,800 to $76,900.

Find out how AXIS could improve your super fund offering and turn it into a superior benefit for your employees, get in contact with us today.

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This document was prepared and issued by AXIS Financial Group (ABN 21 092 889 579, AFSL 233680). The information contained within it is not advice. It provides general information only and does not take into account your individual objectives, financial situation or needs. You should assess whether the information is appropriate for you and consider talking with your financial adviser before making an investment decision. Information in this publication, which is taken from sources other than AXIS Financial Group, is believed to be accurate. However, subject to any contrary provision in any applicable law, neither AXIS Financial Group, nor its employees and directors, provide any warranty of accuracy or reliability in relation to such information or accepts any liability to any person who relies on it.

Let’s talk about the right super fit for your employees.

Testimonials

Mitsui & Co. (Australia) Ltd engaged AXIS Financial Group in reviewing the existing employer super arrangements and clarifying which product provider might be best for Mitsui & Co. (Australia) Ltd and it’s group of companies.

AXIS Financial Group provided a concise explanation as to who might be best and why, in particular ensuring that the internal project team had the information to feel confident as decisions were made. The project team moved from arguably being daunted by the prospect of improving this particular employer funded employee entitlement and better understood how to manage super as a remuneration benefit through the detailed analysis and explanation provided by AXIS Financial Group

Antony Auliso
General Manager - Human Resources Division
Mitsui & Co. (Australia) Ltd

I want to thank AXIS Financial Group for their efforts in handling insurance claims on behalf of the employees of WesTrac. From the moment AXIS Financial Group were appointed to the task, they moved so seamlessly into position and have made sure that WesTrac is not only better serviced as a result but also more informed about claims progress. I also note the outstanding results achieved by AXIS with respect to marketing and placement of our employer super policy.

It seems nothing is a problem for the AXIS team and I would commend all employers to consider this service.

Gary Carter
Group Insurance Manager
WesTrac Pty Ltd

AXIS Financial Group’s knowledge of employer super is second to none.

DXC tasked AXIS Financial Group with consolidating multiple superannuation funds to a
single company-wide default fund. They delivered, displaying superior knowledge of their
industry, along with the highest level of service and diligence.
From start to finish – the initial analysis of our previous funds, the detailed tender process,
the transition to our new fund, and post-transition – AXIS Financial Group always made
themselves available for support.
We strongly recommend speaking to AXIS Financial Group for all matters relating to
employer super.

Michael McGoldrick
Director, Compensation Asia Pacific
DXC Technology