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The May Election – How Has Super Fared?

Given the recent election, the news has been almost entirely focused on political parties promoting their capabilities and successes, as well as highlighting the real or perceived failings of the other parties. The Liberal and Labor party have been vocal over the years about Super and have both made many positive changes – including creating a regulatory framework that delivers value to the public and ensures there is limited opportunity for malpractice. Because of these changes, most of the financial services industry has faced major criticism and has had to pay compensation as regulation increases.

You could assume that based on this level of attention, Super as an asset should be perfectly managed by now and that the change programs undertaken in the past decade should have had a positive impact on the asset. However, this does not appear to be the case, as nothing is new in terms of the value delivered for the cost being paid.

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Exploring Service Models

Within the financial services industry, the Royal Commission should have set the bar in 2018. Instead, we have been taken through a pain and punishment exercise in mistakes that should never have happened. The controlling force within all Super, including Employer Super, is now compliance and adherence to regulation rather than being focused on improving service to the account holder and optimising an Australian employee’s projected income in retirement. Some brands are disappearing whilst others are restructuring, with no apparent improvement in the value being delivered.

In terms of the wider market, there are two competing forces in employer super; one being master trusts and the other industry funds. Within each of these, there are distinct differences in the service model, none of which would be apparent to the public. There is the least variation in the service model within industry funds.

In examining progressive regulation over the past decade, cost has been a clear focus of regulation. There have been many measures taken by the government to increase the cost of compliance while pressuring service providers on price.

The Employer Super Model

We all know the tag lines for each of the different brands because every service provider has an effective marketing department. However, in evaluating which brand is best, it needs to be considered whether your organisation would like to manage super as a remuneration benefit. Medium to large-size companies are more inclined to view and optimise super as an employee benefit, despite every employer knowing that the successful management of their workforce is a prime determinant of their financial performance 

The determination of what is best practice in promoting super as an employee benefit involves examining the existing culture of the workforce and whether Super as a remuneration benefit is a practical proposition. This requires a technical analysis of comparable solutions that may or may not optimise Super at an individual account level. Super specialists (like us!) should scrutinise the current arrangement and compare it to other possibilities using the universal measure of projected income in retirement. This approach ensures any decision is based on knowledge of the options and the financial impact on each employee’s Super. This assessment could identify that the existing arrangement escapes appropriate management attention and essential scrutiny in terms of cost/benefit analysis.

The Positive & Negative Indicators
In inspecting any employer super plan, we identify unasked and unanswered questions and explore what the responses reveal. Any employer plan can have negative indicators. We look to identify these negative indicators and present a different perspective. This frequently results in a reduction in cost, increases in return and improvements to an individual’s Super balance. We frequently find by reviewing the plan with expert eyes, we can deliver significant improvements to an employee’s projected income in retirement. A straightforward exploration and the unearthing of previously unknown facts can easily improve every employer plan, where service is dominated by the product.

Understanding MySuper Investment Defaults

In 2012, MySuper Investment Defaults were introduced and applied within Employer Super. The different products all developed standard investment defaults as an important part of their brand differentiation. Subsequently, APRA introduced a review process to qualify each of these different products. The review process assessed the MySuper performance on a PASS or FAIL basis. The assessment was based on non-disclosed calculations and a review of the cost of investment performance; one FAIL and the product incurs brand damage, two FAILS, and it penalised the product.

The public doesn’t appear to be any the wiser of this review system, in which the ramifications of these failings are significant, and so when an individual receives a notification from their product advising them that their My Super Investment Default failed the APRA Heatmap examination – it does not lead to complaints or often even a change in product.

Improving or changing My Super Investment Defaults is a challenge; pinpointing and identifying the problem to be fixed and then providing an appropriate solution – is especially tricky.

 So, what is best practice?

In any service industry, there are multiple levels of competition which can service the various needs of the individual client. Often, a low cost simple product can be chosen or, depending on preferences, they could opt for a higher cost product with more functionality. 

Interjections from the various governments have sought to improve commercial competition in employer super. However, it may have just homogenised the appearance of the products and further confused those who own the asset. This leads to the question: what is best practice in employer super and how do you identify which arrangement best suits your workforce?

Indeed, if you are looking to offer Super as a superior remuneration benefit to your workforce, one that incentivises staff and minimises churn, it’s difficult to determine the right combination of services required. This is where we can come in. We work closely with you to enhance your employer funded employee entitlement.

 Contact AXIS

Want to learn more? Get in touch with Roy or Richard at AXIS on free call 1800 111 299 or 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