What are the member outcomes annual assessment and product determinations?
Since the 2019/20 financial year, super law requires trustees (those who oversee your super) to assess the performance of each of their superannuation and retirement products. These yearly assessments check whether the financial interests of members are being promoted.
The assessments are known as the Annual Outcomes Assessment. It’s a rigorous review, using a prescribed list of measurements including: investment performance, level of fees and costs, level of investment risk, member benefits, options and facilities, insurance offering, whether the level of insurance premiums erode the super balances of members, scale of the fund and operating expenses.
For MySuper products, they also provide a comparison against all other MySuper products using benchmarks set by the Australian Prudential Regulation Authority (APRA) and a peer comparison to the industry, covering investment returns, investment risk and total fees.
Once these assessments are completed, the trustee must then put the findings in writing, stating whether the financial interests of members holding the product are being promoted – this document is known as the Product Determination and Summary.
What length of time do the product determinations cover, and why are they being published now?
The member outcomes assessments must be completed every financial year (1 July – 30 June), with a product determination provided for that period too. Where applicable, some measurements, like investment performance may be assessed over 1, 3, 5 and 10-year periods ending at 30 June of the previous year.
MySuper product assessments are made using consistent, industry wide reporting measures provided by APRA in December each year. This means, the full assessment can’t be completed until February the following year, which then need to be published within 28 days of trustee approval. So, most product determinations won’t be released until March or April of the year following the end of the income year of the fund (ie a 9-10 month lag).
We publish all our product determinations in line with the MySuper timings.
How does the trustee stay consistent when assessing member outcomes?
There are rules and standards for how member outcomes assessments are performed and measured. These rules are set through super laws and industry standards and include:
- roles and responsibilities for the end-to-end assessment process across the assessments and determinations
- the objectives and benchmarks each product must be assessed against
- what factors must be considered when assessing product performance• the trustee’s approach to assessing their products
- timing and data sources
- the products required to be assessed within both the Super Directions Fund and Wealth Funds.
We’ve performed the member outcomes assessments according to our stated methodology.
What does the trustee consider when assessing member outcomes?
The end-to-end outcomes assessments cover a broad range of measures with approximately 40 different metrics across internal strategy and objectives, as well as comparisons to external industry benchmarks and competitor analysis.
The assessments determines whether the products are promoting the financial interests of members, and look at the appropriateness of:
- the options, benefits and facilities offered to members
- the investment strategy, including the level of investment risk and the return target of the product
- the insurance strategy of the product offered to members
- whether the insurance fees inappropriately erode member super balances
- the impacts of the fund’s scale and business operating expenses
- the fees and costs that affect the return to members
- the investment return after fees, costs and taxes generated for members
- the level of a product’s investment risk compared to how it’s performing.
What does it mean when the Product Determination states the trustee is promoting the financial interests of members?
In short, if our product determination states we’re promoting the financial interests of members, it means we’ve assessed the product and, on balance, found that it continues to deliver appropriate outcomes to members.
The annual outcomes assessment requires trustees to consider the appropriateness of their products, including how it delivers appropriate outcomes for its members.
We do this by assessing each of our products against a range of factors, including: investment performance, fees and costs, investment risk, member benefits, options and facilities, insurance offering, whether the level of insurance premiums erode member super balances, benefits of the scale of the fund and operating expenses.
We also compare our MySuper products against all other MySuper products, using set measures provided by APRA and a peer comparison to the industry to look at investment returns, investment risk and total fees.
We aim to provide a balanced assessment of all relevant measures when determining whether a product is promoting the financial interests of members.
What does peer median or industry median mean?
We assess each investment option against its internal objectives and compare it against other similar superannuation products in the industry (peer relative performance). When comparing against similar peer products we look to the industry benchmark as a way of assessing our products’ relative performance. The industry median refers to the benchmark that indicates the middle score of all peers.
For example, assessing our product investment performance against this middle score tells us whether we are in the top half of outcomes (above the median) or the bottom half of outcomes (below the median) – the best performing investments are found in the top half. However, when we assess our product fee levels, the best performing products are found below the median. This is because members financial interests are promoted through lower fees.
What’s the difference between a product determination and my annual statement (member statement)?
Member outcomes assessments and product determinations are assessed at an overall product level, whereas the member Annual Statements are produced at the member account level. So, the product determination doesn’t necessarily reflect an individual member’s experience in a product.
The annual statement gives a member a personalised view of how their account has performed, including its investment performance. The result can be influenced by things like the investment options chosen, cash flows into the member’s account, level of fees, insurance premiums and investment earnings.
The product determination is assessed at the overall product level and considers all investment options’ performance, fees and costs across the membership, level of investment risk across all investment options, the scale and future sustainability of the fund as well as the benefits offered to members of the product. As these are measured at the product level, they don’t consider an individual member’s account performance.
Each of these provide members with a different view of their product. And, the product determination shouldn’t be a substitute for the member annual statement when assessing a product’s performance.
Why is the personal rate of return on my annual statement different to the published returns?
You can find the published returns for each investment option offered within a product on our performance and unit prices page.
Investment option returns assume money is invested at the beginning of a set time-frame and left to be invested (ie not drawn upon or added to during that time). However, your actual rate of return will vary from this depending on when and if you’ve made contributions, switches or withdrawals over that time, as well as any fees and rebates charged to your account.
Frequently asked questions about our MasterTrust platform
Morningstar Australia is an investment research company that compiles and analyses fund, stock and market data and information across the globe. They were set up to bring professional investment research to financial advisers, individual investors as well as institutional investors. This is a valuable source of data for the comparison of similar superannuation investment options and it enables us and members alike, to understand how an investment option is performing.
Due to the large number of investment options across the superannuation industry this analysis provides a way to assess product performance using a standardised database and helps us make an overall product determination.
What is MySuper?
MySuper is the default investment option provided to super members who don’t choose their own investment options . It’s offered across our MasterTrust superannuation products including AMP Flexible Super, Flexible Lifetime Super, SignatureSuper, CustomSuper and SuperLeader.
This means that members of these products who haven’t chosen their own investment options have been invested in the AMP MySuper lifecycle fund instead.
What fee reductions have been made in the last few years? And what were my fees before that?
Between 1 July 2019 and 30 June 2020, we reduced the number of super products we offer from around 70, to 11. We also passed on over $80 million worth of benefits to members of the Super Directions Fund (SDF). This has improved the financial outcomes for members through reduced fees and the removal of grandfathered commissions where applicable.
The ongoing commitment to simplify our business is expected to deliver further cost savings to members during 2021, including fee reductions across the Super Directions Fund.
Members were notified of the changes to products, investment options and fees in 2020 during the ongoing simplification program and should refer to the relevant PDS for details of fees and costs.
Where can I find out more about fees charged on my account?
Speak to a super coach
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It’s important to consider your particular circumstances and read the relevant Product Disclosure Statement or Terms and Conditions before deciding what’s right for you. This information is general only, hasn’t taken your circumstances into account, and is provided by N.M. Superannuation Proprietary Limited ABN 31 008 428 322, AFS Licence No. 234654 (N.M. Super) as trustee of the Super Directions Fund ABN 78 421 957 449 / Wealth Personal Superannuation and Pension Fund ABN 92 381 911 598. N.M. Super is part of the AMP group.
Product Determinations are issued by N.M. Superannuation Proprietary Limited (NM Super) ABN 31 008 428 322 AFSL 234654 RSE L0002523 as trustee for the Super Directions Fund and the Wealth Personal Superannuation and Pension Fund. Products in the Super Directions Fund and the Wealth Personal Superannuation and Pension Fund are issued by N.M. Super, which is part of the AMP group (AMP).This information is provided by NM Super and is general in nature only. It hasn’t taken your financial or personal circumstances into account. It’s important to consider your particular circumstances and read the relevant product disclosure statement or terms and conditions available from AMP at amp.com.au or by calling 131 267, before deciding what’s right for you. You can read our Financial Services Guide online for information about our services, including the fees and other benefits that AMP companies and their representatives may receive in relation to products and services provided to you. You can also ask us for a hardcopy. All information on this website is subject to change without notice.
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