TTS is now being run by funds as their Outcomes Test Framework in preparation for the Outcomes Standard requirements which commence in January 2020.
The TTS App is run in Beta Client Mode using a fund’s membership demographic dataset (member’s age, balance and projected retirement balance from the last statement run), existing investment option return and loss ratios, plus APRA peer comparison information (ref. letters issued during last quarter of 2017).
The TTS Client Report, regardless of if TTS is adopted, provides comparisons of projected retirement outcomes under a one-size-fits-all default, age-based default and TTS (which can be audited) plus peer comparison analysis. It also provides the required cohorts and its analysis, member attraction and retention strategic analysis and other fund benefit (including sequencing risk management) analysis. That report is then used as the basis to meet each of the requirements in the Outcomes Assessment (SPG 225) and subsequently for Strategic Business Planning Standard (SPG 221).
TTS in Live Mode: uses the most recent fund member data, the fund’s published long run actual return and loss ratios per investment option and fund-specific LRBs and Glide Paths. An annual Implementation Report is provided which will also meet the Annual Outcome Test requirements.
Implementation: Assists trustees with all aspects of planning and implementation of the TTS Smart Default into their existing operations.
Analysis: Consulting services in relation to the re-calibration of the Smart Default settings (Lifestyle Retirement Bands – LRB’s and Glide-paths) based on trustee views and demographic changes of fund members over time.
Support: General support in relation to the functionality of the TTS Application or re-calibration of TTS for a fund including subsequent upgrades and versions.
Reports have so far been run on over 100,000 members and over $30B in MySuper assets, using standard LRB’s and Glide Paths, with the results being consistent with the 1% p.a. real improvement and lower sequencing risk.
TTS is implementation ready and will follow the implementation blueprint which was completed a major international consulting firm.
Initially a Client Report is completed which can also be used as part of the funds Outcome Test requirements.
Client Reports use a funds own Investment Option return and loss data plus their fund MySuper membership demographics from the last statement run.
The next step is to include trustee agreed LRBs and glide paths within these Client Reports based on that funds own unique circumstances, in preparation for implementation.
Implementation will use up-to-date data from the annual statement process, trustee agreed LRB’s and glide paths (from the client report), with member automatic investment option switching occurring some months later, in a staggered fashion.