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The ever-changing world of Super

One of the main objections about Super is the government is always changing it. So far, no government has effectively changed the essence of the original legislation, notably around the sole purpose test (particularly relevant for SMSFs). To date, every working Australian, except for the self-employed, accumulates super through their employer contributions.

In business, if anyone talks of change, we all reflect on whether we can expect or have seen improvements in terms of efficiency. Given the cost of the Royal Commission in 2018 and the Government’s adoption of every recommendation, it was reasonable to expect to see changes in financial outcomes around super as an employer funded employee entitlement. However, despite all the recommendations and changes made, in terms of the value delivered by platforms or advisers around employer super – no one is any the wiser about the improvements made. It leads us to question:

What are the changes that have been made and have they been effective?

  • Get in touch. We are here to support you.

What were the changes?

Stopping Bad Behaviour

The Government and the Regulator have been determined to eliminate unacceptable behaviour in the industry. Over time, remediation costs have been high, administrationn costs have lowered, the licensing regime tightened and educational standards revised.

It’s All About Scale

Simply, scale is cost based on percentage-based fees. So, if you are a platform servicing employer super, then scale has become increasingly important – with the initial target limit of $30b increasing. This appears to have been a Government direction to force fees down, as well as introduce other initiatives such as the APRA Heat map and stapling. It has resulted in the number of platform providers in the market reducing.

Many of these changes appear to be punitive. This is notably distinct from successful change management strategies and is likely to be more damaging to market competitiveness as a result. There is clear evidence of cost-cutting within platforms to maintain margins, which is more likely to reduce the quality of service as opposed to improving the operation of the financial services industry overall.

Is there an alternative approach?

In examining any industry and its operations, one has to contemplate two modes or models of operation:

  • Sales Model – this is about brand, value proposition and point of difference in market. This is the method through which a supplier offers services at a price to make a target level of profit.
  • Service Model – in this model, the cost is incurred by the individual for a product or service which will deliver a benefit well over cost.

It is important to consider these models when assessing whether an employer super is the preferable way to deliver a superior remuneration benefit as funded through SG contributions.

What Can Happen?

In some industries, there is a balance between sales and service models, a situation to everyone’s advantage. With employer super, the sales model is out of kilter with the service model. The supplier simply promises to deliver in areas where they have limited capability and then still charge a premium price for their offering. There is a noticeable public lethargy (a different word from “disengagement”) around super as an asset. It has not been addressed in public discourse in recent decades.

By paying attention to super on an individual account level, everyone can improve performance and therefore their account balance at the point of retirement. This is the key moment when you discover what you can expect by way of income after you finish your working life. It is possible that super can be managed and delivered by each employer as a superior benefit in a much better way than it is now.

Employer Super vs Public Perception?

Public perception is based on clever product marketing and the annual returns published throughout the year, but especially at year-end when statements are delivered. Every product provider may promote their value proposition, but not all products are actually best for their customers as they all claim.

Our takeaway

AXIS Financial Group has analysed best of breed between platforms supporting employer super versus personal retail and industry fund accounts. Our projections consistently show that employer super has a place in the Australian market and, if well managed, designed and serviced, can provide a superior financial outcome for employees. That is, besides the additional advantage of insurance without proof of health at premiums based upon a group policy.

Every platform in the employer super market positions itself as your sole source of information and they are all adept in both sales and client management. We would encourage any manager responsible for employer super as part of their job responsibility to ask different questions and seek a source of information who has not reciprocal trade with your platform. This out-of-the-box thinking on behalf of your employees will aid you in realising your responsibility to examine and measure the value being delivered to your workers, a move that would be consistent with good governance. Want to learn more?

Connect with me, Harry Burke on LinkedIn or get in touch with myself, Roy or Richard on 1800 111 299 or email consulting@axisfg.com.au to make an appointment. Thank you for reading this far!

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