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Employer Super Masterclass

The Current Environment

You might assume that significant changes to the financial services industry must have taken place after the Royal Commission, but in reality nothing much has changed in terms of service value, let alone improved.

Royal Commissions are organised by politicians and civil servants and staffed by people who are not necessarily specialists in the field under investigation. While the results of such investigations are always promoted as effective, a close examination of the actions since the investigation would suggest that the improvements are simply fixing past errors and not actually tackling the really bad practices that prevail. If you are going to succeed in essentially fixing an industry as important to the public as super, you need to follow the tried and tested process of investigating both good and bad within the industry to identify the problem before you set about changing things.  

Currently we have a super industry somewhere between crisis and chaos, partly caused by regulatory change and political interference in what is a highly specialised area and the chaos that follows high level merger and acquisition activity. 

Overall, what is not universally improving within employer super, is the beneficial value being delivered to individual account holders.

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Super as a Remuneration Benefit

When introduced, super was not a tax but it was to be fully funded by employers. Understandably, employers were not very impressed at the time, the compromise being it was introduced at 3% but is now heading towards 12% of ordinary time earnings (OTE). Employers were slow in understanding the cost and there are still many employers who see super as an obligation and not an opportunity. Many employer super arrangements were put in place based on some existing reciprocal commercial arrangement and some could not be changed without causing damage to this relationship.

After payment of current wages and salaries in each pay period, super is the most significant employer funded employee entitlement, and yet employers do not seek to optimise it. Most simply do not have the skills to hold their product provider accountable for the delivery of value. Note the distinction in calling them product providers, as most would actually promote themselves as service providers but fall well short of delivering a service which will optimise each employee’s balance.

 When asked, every platform has said it would not be feasible to deliver value at an individual account level as it would require too much resource.

Most employers make the mistake of only talking to their current product provider about their employee’s super and therefore most managers involved in managing super as a remuneration benefit are under-informed, with only a single source of input.

Product providers do not manage super as an employee benefit. To do so would highlight the shortcomings of their sales and service model and the fact that their value proposition is not being delivered. 

 Managing Super as a Remuneration Benefit

With the level of regulatory complications around super, it is virtually impossible for any employer to directly manage super as a remuneration benefit. Employer super can be a minefield and that single fact can have the employer conclude it is only about managing their obligations in making contributions and not about optimising the value of each employee’s investment in super.

Other complications then present themselves around plan design, in particular the provision of appropriate insurance for employees. 

Unfortunately many people have a “vested” interest in an employee’s super asset, the government included, and all of them will influence any revision of your past decision to go with a particular provider. When selecting the product provider of your employer plan, one realises it is a long term decision and not something you want to do too often.

 It would appear to be common sense that every so often any medium to large-sized employer may want to seek confirmation from a suitably qualified product specialist in looking under the veil of their current provider and examining how they compare to other options available from the marketplace. 

However, most super consultants are tender consultants with limited ability beyond running a tender to change the platform. In adopting such an approach, you may well realise you have changed the label but still not solved the problem.  

In improving anything in business, the first step is always to clearly identify what the problem actually is and then decide the best course of action to improve outcomes. It is exactly the same in managing employer super. Knowledge is required for corrective action to be successful.

 Both Knowledge and Capability

One without the other results in a deterioration in performance. Medium to large-sized employers need to find an outsourced service in the financial service sector with the ability to provide deep insight into the various sales and service models in employer super and which one might be the right choice for your organisation.

This outsourced service must possess certain skills to assist every employer in managing super as a remuneration benefit. Such a service will have some consultancy skills but not operate in any way similar to other super consultants. Such a service will also understand the importance of financial advice both for the overall asset and what might be best achieved by personal service at an individual account level. Finally such a service would not be connected to a product but would most certainly be a product specialist in explaining what is good and bad about each platform within employer super.

For more information

Please call 1800 111 299 and ask for Roy or Richard, the Super Consultants at AXIS Financial Group. Alternatively email consulting@axisfg.com.au.

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.


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