(pictured: Pauline Vamos and Warren Chant at last year’s Awards)
Pauline Vamos, who last week announced her intention to retire from the chief executive spot at ASFA in June, will be the master of ceremonies at this year’s Chant West Super Fund Awards, to be held in Sydney on May 4. Vamos has been at the helm of ASFA since 2007.
Vamos said of the Awards: “It will be a great night to reflect on the innovation and the many examples of excellence across the industry. I am in no position to pick winners but I know a lot of work goes into applying the Chant West criteria, and I look forward to hearing the results of all that work on the night.”
She agreed to stay with the association until June while it conducted a search for her replacement. Prior to ASFA Vamos was an independent industry consultant specializing in compliance issues and before that spent six years at ASIC in the business operations and licensing part of financial services regulation.
Chant West has outlined the focus for the assessments in each of the 12 Awards categories. As previously announced, it also outlined the four underlying industry themes impacting on the assessments this year. They are: investment strategies in a low-growth environment; dealing with scale; member communications in the digital era; and, reactions to the shake-up in group insurance.
The descriptors in each Awards category are:
Super and Pension Funds of the Year
The super fund award focuses on the experience of a typical member, that is, someone with an account balance of up to $50,000 in their employer’s default MySuper fund. It recognises excellence across a range of key criteria, namely: investments, member services, fees, insurance, administration and organisational strengths.
The pension fund award takes into account the same criteria (with the exception of insurance) but recognises that the pension phase of superannuation is very different. The award relates to the typical retiree member, who has an account balance of about $200,000. They have different priorities and place different demands on their funds compared with accumulation members, and our methodology reflects that.
Corporate Solutions Fund of the Year
Many Australians working for medium-sized and larger employers have their super with a corporate plan. There are about 20 funds, mainly master trusts, that cater for this sector.
This is a large and important segment of the industry, with assets of about $150 billion and about 4 million members. There are substantial economies of scale available, and we look at how these have been harnessed and applied in the best interests of members.
Specialist Fund of the Year
While most major funds have a broad spectrum of members, there are others, both large and small, that cater for a fairly homogeneous group – often from a single industry or occupation – that has unique or specialised needs. To satisfy those needs, these funds need to pay a lot of attention to their benefit design and members services.
To compete for this award, funds still have to score well in all the main criteria we consider. In addition, we take into account what they do that is specific to their membership and results in greater member engagement and better retirement outcomes.
Advised Product of the Year
Retail master trusts mostly target people who are more engaged with their super – so-called ‘choice members’ – who have different needs to the majority of default fund members. They generally have advisers and seek a wider range of investment choices and more ‘bells and whistles’ in the services the fund provides.
This award recognises funds that score well in our main criteria and have also invested in dedicated systems to help advisers manage their client base and access their client details.
Asset Consultant of the Year
While small in numbers, this is by far the most influential group in the industry in terms of their ability to influence member outcomes.
This award recognises those asset consultants who have provided outstanding service and, through their strategic thinking and research, have advanced the way funds invest.
Best Fund: Investments
Investment is the most important aspect of superannuation. Chant West assesses funds on their investment processes and resources and whether they are likely to deliver strong returns. The key issues are the quality of people and processes. We look closely at investment governance, including the investment experience of the Investment Committee and the internal investment team, and who is actually responsible for making decisions.
We continue to take a dim view of funds that simply increase the level of passive management in order to reduce costs. We think that is likely to be a false economy, and not in members’ best interests. We do recognise, however, that passive management may have a role to play, particularly where managers face capacity constraints and in those asset classes where it is very difficult to generate net alpha.
Best Fund: Member Services
Member services are the second most important aspect of superannuation, because they have the ability to engage members and so help them make the most of their super.
“This year we have placed particular emphasis on member statements,” Chant West says. Do they identify whether the member has a retirement income gap and, if so, are there effective calls to action to encourage them to do something about it?
“We are also very interested in the robustness of funds’ retirement calculators, because after the member statement this is where they can best help members understand their retirement goals and whether or not they are on track to achieve them.”
Best Fund: Insurance
Group insurance has undergone a shake-up following a period of sizeable premium increases as a result of a surge in disability claims. This has prompted many funds to review the structure of their insurance offering to see whether it represents value for money and delivers the right benefits to the people who really need them.
Assessing a fund’s insurance offer is one of our most difficult tasks, because insurance is very complex and individual specific. Premiums vary according to age, gender, occupation and smoker status, meaning that there are about 1,000 individual situations to assess. We take all those situations into account when assessing premiums – and of course we also look at conditions and the appropriateness and sustainability of the benefit design.
Best Fund: Innovation
Recognising innovation within the industry is a key theme of the awards. We continue to see innovation in many areas such as member segmentation, insurance design, retirement income solutions, account consolidation processes and member communications. This year we will be especially looking at how funds use digital media to help members understand their likely retirement income and what they can do to improve it.
Best Longevity Product
Investing in retirement, as opposed to investing for retirement, is one of the hottest topics in the superannuation industry. At present, there are only a handful of products that truly cater for retirees’ needs.
Chant West says it is keen to encourage funds to develop new and innovative products for retirees. With policy makers slow to move, there still needs to be more innovation and more lobbying to help make longevity-aware products more viable.
Chant West’s integrity award recognises funds that are doing the right thing by their members.
Chant West says, in the current environment of increased scrutiny on the fees and costs of superannuation, funds may be tempted to reduce fees and insurance premiums in ways that are not in the best interests of their members.
“We want to recognise the funds that are finding the right balance between offering lower fees and premiums but continuing to provide benefits and services that members really need, including quality investment and insurance products, financial advice and effective member engagement.
“We will also focus on disclosure. Many funds are still not as transparent as we would like them to be, especially about their fees and insurance premiums. Our award recognises funds that are doing the right thing by telling their members what they really need to know, in a way they can understand, and complying with the spirit as well as the letter of the law.”
The Awards presentations are being held at the Ivy Ballroom at a black-tie dinner on May 4. For information go to: www.chantwest.com.au/fund-awards/about-the-awards