POWERED BY MOMENTUM MEDIA
Super fund expenses decrease
While compliance and marketing and communications expenses have increased for all superannuation funds, technology spend has decreased, according to Rice Warner.
The research house’s ‘Superannuation Expense Benchmarking’ survey also found that in line with previous years, retail funds had the highest operating expenses per member over the year to 30 June 2015, and industry funds the lowest.
Public sector funds experienced a low increase to experience per member with corporate funds being the only sector that experienced a decrease, a result from a declining population as the more expensive smaller company funds have outsourced to multi-employer funds.
Rice Warner said technology expenses decreased by 29 per cent mainly due to SuperStream related projects being completed or wound down.
“The report illustrates that overall operating expense for the peer group decreased over the year to 30 June 2015. The savings are being used to improve product design and features for members,” the report said.
Compliance expenses increased by 29 per cent and had been increasing at a steady rate since 2013.
“This can be attributed to the new APRA [Australian Prudential Regulation Authority] reporting standards. As a result, funds are increasing the size of their compliance teams to meet growing board, regulator and community expectations around risk management and governance,” the report said.
Marketing and communication costs increased by 17 per cent and had become a large component of super fund expense budgets over the past decade.
“Many of the differentiating features of funds have become common place, while aspects that used to define industry segments have become blurred,” the report said.
“At the same time, many funds are putting in place strategies to grow their membership numbers inorganically which comes at a cost.”
Recommended for you
Jim Chalmers has defended changes to the Future Fund’s mandate, referring to himself as a “big supporter” of the sovereign wealth fund, amid fierce opposition from the Coalition, which has pledged to reverse any changes if it wins next year’s election.
In a new review of the country’s largest fund, a research house says it’s well placed to deliver attractive returns despite challenges.
Chant West analysis suggests super could be well placed to deliver a double-digit result by the end of the calendar year.
Specific valuation decisions made by the $88 billion fund at the beginning of the pandemic were “not adequate for the deteriorating market conditions”, according to the prudential regulator.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
Spire Oaktree Opportunities XI Second Close
61.07 3 y p.a(%)
2
Spire Oaktree Opportunities XI First Close USD
59.21 3 y p.a(%)
3
DomaCom Lot 21 Chellaston Road Munno Para West SA 5115 Australia
31.56 3 y p.a(%)
4
Fidante Credit Suisse Global Private Equity
31.06 3 y p.a(%)
5
DomaCom 4/27 Crombie Avenue Bundall QLD 4217 Australia
26.81 3 y p.a(%)
