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:
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.
