This MySuper Outcomes Tool uses information reported by MySuper Funds and published by APRA in the:
It also utilises the RBA Inflation Calculator, average annual inflation rate of 1.6% between June 2014 and June 2019, as CPI.
- The Percentage of Members in each Cohort, is contained in MySuper Annual – Table 7 columns W to AD
- The Base Fund Retirement Balance Outcome, for each Cohort, is the excel standard Future Value calculation rounded to the near thousand, on a fortnightly basis (26 per year), at the end of the fortnightly period.
- The Rate used, has been matched to the fund and its life-cycle stage.
- For Return Target, the MySuper Quarterly SRF 700 item 1 Return target (annualised target net return above CPI over ten years), from table 1A (single strategy) and 1B (life-cycle options) matched to each fund and lifecycle by age cohort, is used. Where multiple lifecycle options occur within an age cohort, a simple average is applied.
- Similarly for Heat Map NIR, the HeatMap data – NIR adjusted for CPI and Total Admin & Operating Expenses, is applied to (single strategy) and (life-cycle options) matched to each fund and lifecycle by age cohort.
- NIR adjusted for CPI and Total Admin & Operating Expenses, is the HeatMap data Column J (5_year_net_investment_return_nir_p_a) figure less inflation (1.6%) less Total Administration and Operating Expenses, from MySuper Annual (column T).
- The period used for each age cohort up to retirement at age 67, is 47 years (<25 yrs), 37 years (25-34), 27 years (35-44), 19.5 years (45-49), 14.5 years (50-55), 9.5 years (55-59), 4.5 years (60-64) and 0 (65-69 years). Age cohorts are based on the APRA data age brackets.
- The payment (or contributions amount) is the average Adjusted Contributions amount per fund.
- Adjusted Contributions are:
- Average contributions per average account, being employer and member contributions (SRF 330.2 item 1.1 and 1.2) from APRA Annual Table 1 , divided MySuper Annual – Table 7 total number of accounts, less
- Contributions tax at 15%, less
- Insurance Premiums, being MySuper Annual Table 1 total Outward Insurance Flows SRF 330.2 item 8.2, divided MySuper Annual – Table 7 total number of accounts.
- The present value (or current balance) is the average account balance for each age cohort, being MySuper Annual – Table 7, total balances divided by total accounts (SRF 610.2 item 5.5/item 5.4).
- Outcome Overlay on Base Fund, replaces the rate (see 2.a above), of the base fund with that of the overlay fund, calculated on the same terms.
- Retirement Annual Outcome equals Base Fund or Overlay Fund Retirement Balance Outcome multiplied by 0.0566 – rounded to nearest $100. This is a reasonable conversion given Regulators have previously used this conversion factor.
- Sequencing Risk for the Base Fund and Overlay Fund, is the MySuper Quarterly tables 1a and 1b (SRF 700 item 3), level of investment risk (estimated number of negative net investment returns over a 20 year period), as a percentage matched to each fund and lifecycle by age cohort.
- Well-Designed default guideline, replaces the rate Return Target and Heatmap NIR rates and sequencing risk with a guideline based on the Heat Map. The guideline rate is the Return Target and Heatmap NIR rates and sequencing risk divided by the HeatMap data column I (strategic_growth_asset_allocation), multiplied by 95 (<25 years), 90 (25-34 years), 85 (35-45 years), 80 (45-50 years), 75 (50-55 years), 70 (55-60 years), 65 (60-65 years) and 60 (65-70 years).
- See also Figure 6, being 5-year net investment return peer comparison by average growth allocation p.a. (as at 30 June 2019) in the MySuper Product Heatmap – data insights .
- The guideline does not yet take into account Productivity Commissions finding on the good prospects for further personalisation of life-cycle products, or the resulting better matching to member needs. That requires additional data.
- Engagement Outcome Ratio, is the inverse from Heat Map Data File, column G “proportion_of_total_assets_in_mysuper”, per fund. That is it displays the proportion of total assets not in MySuper (e.g. where a member has selected an investment option for those funds).
- In this MySuper Outcomes Tool:
- The Speedometer is the total Outcome across all age cohorts in dollar and percentage terms,
- Outcomes are in today’s dollars,
- Where multiple fund lifecycle options occur within an age cohort, a simple average is used,
- Where data is missing averages are calculated excluding that element and Zero,#/DIV, NA or Value is indicated in the Tool,
- No responsibility is accepted for errors or for updating.