What this Tool Does
The Tool displays a selected Base Fund’s average Outcome (in retirement balance or retirement income terms) and what another selected MySuper fund (Overlay Fund) could have provided instead, by age cohorts and in total.
The Tool uses either APRA Target Return data or Heat Map 5 year net investment returns, less CPI and total administration and other operating expenses, per age cohort. It is driven by standard formulae to produce retirement outcomes (Retirement Balance or Retirement Income) by age cohort.
It also displays average sequencing risk over age 55 years, by age cohort for both the Base and Overlay fund.
This MySuper Outcomes Tool contains Factual Information, based on APRA Annual, Quarterly and Heat Map Statistics, a RBA inflation calculator (ABS Statistics) and standard mathematical formulae.
The Tool is designed to assist MySuper Trustees met their SIS Act obligations to act in member’s best financial retirement interests in setting the funds default design; public policy makers in determining the efficiency of converting contributions into retirement outcomes, the press, politicians and voters in considering the national benefits of the Superannuation System.
Its focus is on Outcomes, not a funds own returns. It assists in comparing the Outcome from funds with different member age profiles and investment risk, fee and return ratio’s.
It enables single, age based or well-designed default designs to be compared.
It is consistent with APRA Capability Review request for an Outcomes Tool focused on an intense retirement promise to members.
The Tool also includes a Well-Designed Life-Cycle Guideline. This guideline follows on from the Productivity Commission FINDING 4.3 that “Well-designed life-cycle products can produce benefits greater than or equivalent to single-strategy balanced products, while better addressing sequencing risk for members. There are also good prospects for further personalisation of life-cycle products that will better match them to diverse member needs, which would require funds to collect and use more information on their members. Some current MySuper life-cycle products shift members into lower-risk assets too early in their working lives, which will not be in the interests of most members.”
The Tool does not yet include the good prospects for further personalisation of life-cycle products, or the resulting better matching to member needs, as this requires factual data beyond that currently released by APRA. Trustees however do have that information on their annual member statement files. Trustees should refer to www.trusteetailored.com for more details.
The Tool is not a retirement calculator, there is no member or retail element and no clients or decisions. There are no individual estimates or projections, no user defined assumptions or criteria, no recommendation or a statement of opinion, or a report of either of those things and no financial product advice. Only whole of fund and age cohort average Outcomes are displayed. The whole population of 96 funds can be selected against each other, subject to that data being held by APRA. The Tool does not and is not intended to imply any recommendation or opinion about a financial product or class of product.
I understand I will receive a once only download of the Tool and will be responsible for its use, including any distribution to 3rd parties.