MySuper - Market Trends

MySuper - Market Trends

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MySuper - Market Trends

HENDRIE KOSTER


More than two years have now passed since the introduction of the MySuper regulations and the mandatory requirement to invest all default contributions into an approved MySuper product.

As the dust has now well and truly settled on the MySuper implementation, we take stock on how MySuper defaults have evolved over the last two years.

As at December 2015, there were 116 licensed MySuper products (the same as in January 2014), however there have been notable changes within the composition of this group. The table below outlines the number of approved MySuper products as at 31 December 2015, broken down by market type and whether they have opted to use a static or lifecycle investment approach. Lifecycle products have increased from less than ten prior to the introduction of MySuper, to 29 as at December 2015 (representing approximately $145 bn or 32% of total MySuper assets). Static SAA approaches continue to be the most common MySuper approach.
 

As at 31 December 2015, 103 RSE licensees have approval to offer MySuper products. Given the 146 RSE Licensees in existence today, this means a significant number (43) do not offer a MySuper product. There are several reasons why an RSE licensee may not seek APRA authorisation for a MySuper product, including:

  • They have opted to offer ‘choice’ options only. We have observed several smaller funds with active membership bases contacting members individually to ensure that each member has expressed an active choice and as such are no longer a ‘default member’.
  • They have decided to ‘outsource’ their default investment option to other providers with an approved MySuper license.
  • They are not covered by the legislation - for example, closed funds, Defined Benefit funds or trustees of Self-managed super funds.
     

While some elements of the broader industry changes (mainly around reporting and disclosure) are still being progressed, there is no doubt that the 1 July 2017 MySuper implementation deadline marks a significant milestone for how the savings of default members are managed.
 

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