Last updated: 24 May 2024
Since the QSuper/Sunsuper merger in 2022, we have been undertaking a comprehensive review of the investment products that Australian Retirement Trust (ART) offers across the Super Savings and QSuper products. The objective of the review was to use our scale and in-house investment expertise to develop a high-quality ART investment menu designed to help meet the needs of our 2.3 million members.
As a result, we are making changes which will align the investment menus for Super Savings and QSuper account holders.
For members currently invested in an option that is being closed, their account balance will be invested in the most similar new option(s) available, taking into account the objective, risk level or asset allocation for the option(s). Their future contributions will also be automatically switched to the new option(s).
Some options are being renamed.
See the full summary of option changes on our website: find the Super Savings changes here and QSuper changes here.
The design of the new suite of investment options is evidence-based to prioritise the investment needs and preferences of our membership. We undertook a lengthy and considered process that sought feedback from members, financial advisers, employer representatives, ratings agencies and behavioural scientists.
The resulting suite of investment options is based on the insights and evidence uncovered during the review process and was subject to Committee and Board scrutiny.
Super Savings: Our new menu will include two new diversified options: the High Growth Index option and the Balanced Risk-Adjusted option.
The High Growth Index option will invest in a diversified portfolio of listed assets with around 90% growth assets (Australian and international shares).
The Balanced Risk-Adjusted option invests in just over 60% growth assets. We adjust the risk for this option by holding fewer shares and more bonds.
QSuper: Our new menu will include seven new diversified options and seven new asset class options. Several of these options are similar to those on the current QSuper investment menu.
Our new diversified options are: High Growth, Balanced, Conservative-Balanced, Conservative, Socially Conscious Balanced, High Growth Index, and Balanced Index.
Our new asset class options are: Australian Shares Index, International Shares Hedged Index, International Shares Unhedged Index, Listed Property Index, Unlisted Assets, Bonds Index, and Cash.
Adviser research showed that there was a greater demand for low-cost indexed options as opposed to actively managed single sector options. This was supported by the inflows into the current Super Savings asset class index options versus actively managed options.
7 QSuper options are closing. Because most of the options on the new suite of investments are being seeded by the currently offered Super Savings options, for ease of transition, we made the decision to consolidate the QSuper options with the Super Savings equivalent, taking into account the objective, risk level or asset allocation for the option.
The QSuper options that are closing are all similar to the new options. For example, the investment objectives and risk labels of the QSuper Moderate and Conservative options are the same, thus the mapping of the QSuper Moderate option to the new menu Conservative option.
No. The new High Growth option will have around an 85% allocation to growth assets. This is the same allocation the current Super Savings Growth option has now. The change in name just provides more distinction between the option names and is aligned with the superannuation market names.
The ‘Australian Listed Property’ option will change name to be the ‘Listed Property Index’ option on 1 July 2024. The Listed Property Index option will invest in a portfolio of globally listed shares, and this is different to the current option which has a 100% strategic asset allocation to Australian listed property. Australian listed property will represent approximately 3% of the new option. With this change, clients invested in the Australian Listed Property option will invest in a more diversified portfolio, from 1 July 2024.
| Investment option | Current to 30 June 2024 | From 1 July 2024 |
|---|---|---|
| Australian Property Index (name changing to Listed Property Index from 1/7/24) | Investment objective: Closely match the returns of the performance benchmark before investment fees and costs, transaction costs and investment taxes (where relevant). Performance benchmark: S&P/ASX 300 A-REIT Accumulation Index |
Investment objective: Aims to closely match the returns of the performance benchmark. The objective is before investment fees and costs, transaction costs, and investment taxes (where relevant). It's measured over rolling 3-year periods. Performance benchmark: FTSE EPRA/NAREIT Developed Rental Index Net Total Return in $A hedged. |
| 10 largest holdings | % |
|---|---|
| Goodman Group | 31.2 |
| Scentre Group | 11.1 |
| Stockland | 7.6 |
| GPT Group | 6.4 |
| Dexus AU | 5.9 |
| Mirvac Group | 5.9 |
| Vicinity Centre | 5.6 |
| Charter Hall Group | 4.1 |
| National Storage REIT | 2.1 |
| Region Group | 1.9 |
| Total | 81.8 |
As at 31 December 2023
As an indication of the top holdings of the Listed Property Index option from 1 July 2024, the table below shows the top 10 holdings of the underlying performance benchmark as at 31 December 2023.
10 largest holdings: FTSE EPRA/NAREIT Developed Rental Index Net Total Return in $A hedged
Note: this is the index holdings NOT the option holdings as the Listed Property Index option will change performance benchmark from 1 July 2024.
| 10 largest holdings | Benchmark |
|---|---|
| Prologis, Inc. | 8.08% |
| Equinix, Inc. | 4.94% |
| Welltower Inc. | 3.18% |
| Public Storage | 3.14% |
| Simon Property Group, Inc. | 3.04% |
| Realty Income Corporation | 2.73% |
| Digital Realty Trust, Inc. | 2.67% |
| Extra Space Storage Inc. | 2.20% |
| VICI Properties Inc | 2.17% |
| AvalonBay Communities, Inc. | 1.74% |
| Total | 33.89% |
As at 31 December 2023
There’s no change to the tax implications for members. While there are tax costs when we buy and sell assets, these have already been accounted for. This has not changed.
When we invest our members’ super, we set aside an amount of money that we estimate will be the amount of tax that will need to be paid when assets are sold. We adjust this amount quarterly, where applicable. We call this tax provisioning.
We adjusted some of the maximum and minimum amounts that an option can invest in each asset class to better reflect the range in which we wish to manage the asset class for a particular option. The ranges help guide investment decisions and manage risk to achieve the investment objective.
Options that have been retained or renamed will have performance histories. The performance histories will be based on the continuing Super Savings option histories and the QSuper Balanced option history.
For Super Savings members:
These changes aim to improve the retirement outcomes of our members. The Lifecycle Investment Strategy is expected to deliver higher returns over the long term for members of all ages. Along with this there is also a higher risk of negative returns in any given year. Because super is a long-term investment, we believe the changes are in the best financial interests of our MySuper members.
For QSuper members:
The changes aim to improve the retirement outcomes of our members. The Lifetime investment strategy is expected to deliver higher returns over the long term for members of all ages. Along with this there is also a higher risk of negative returns in any given year. Because super is a long-term investment, we believe the changes are in the best financial interests of our MySuper members.
If a client holds units in the Voluntary Preservation Plan (VPP), the assets supporting this investment are currently invested in the Moderate option for Accumulation account holders. From 1 July 2024, the assets supporting this investment will change so that they are invested in the Conservative option. Please note the VPP is a closed option.
For members, Defined Benefit Plans are not affected by these changes. If members also hold money in an Accumulation or Income account, then they can take advantage of the new suite of investment options via that account.
From 1 July, your client will be able to invest in as many of the investment options they would like to.
Based on current demand and extensive market research, the Board determined that it was in our members’ best interests to close this option.
The International Shares Unhedged Index option was the closest option, taking into account the objective, risk level and asset allocation.
From 1 July 2024, Diversified Alternatives will be called 'Unlisted Assets' and incorporate property. Here’s a breakdown of the asset allocation:
Strategic asset allocation to 30 June 2024 – Diversified Alternatives
Private Equity – 35%
Infrastructure – 35%
Alternative Strategies – 25%
Cash – 5%
Strategic asset allocation from 1 July 2024 – Unlisted Assets
Private Equity – 30%
Infrastructure – 30%
Property – 25%*
Private Credit – 15%
*Includes a strategic allocation of 5% to listed property for liquidity management.
As at 31 March 2024, the actively managed Super Savings Diversified Bonds option duration was 5.16 and the Diversified Bonds Index option (to be renamed Bonds Index from 1 July 2024) was 5.72.
For both Super Savings and QSuper account holders, transfers to new option(s) will use the last available unit price on 30 June. As this is a Sunday, the last available unit price will therefore be when markets close on Friday 28 June. When markets open on Monday 1 July, members will be invested in their new option(s). Members will be invested in the closing option(s) up until the close of business on the last business day before 1 July 2024.
The last available unit price on 30 June 2024 will be used to calculate the amount a member has invested in each option being transferred. This will be the dollar value switched to the relevant investment option.
Please note, for your Super Savings clients, Adviser Online won’t display the new investment for closed options until Wednesday 3 July 2024.
The QSuper Balanced option is the only QSuper Choice option that carries over to the new menu. It will be renamed Balanced Risk-Adjusted on 1 July 2024, and it will become available to all ART members (i.e. both QSuper and Super Savings account holders). The performance history of this option will carry over to the new menu. The risk of the option will be adjusted by holding fewer shares and more bonds.
The other QSuper Choice options won’t be part of the new menu, and this includes the QSuper Aggressive, Socially Responsible, Moderate, Australian Shares, International Shares, Diversified Bonds and Cash options. Members will be switched to a similar option taking into account the objective, risk level and asset allocation for the option.
For your Super Savings client(s), the easiest way to access this information is via the Adviser Online ‘Bulk Client Report’ we publish for registered advisers at the start of each month. To find this, head to the ‘Reports’ tab in Adviser Online. If you don’t have access to Adviser Online, register here.
If you have a QSuper client(s), request a client summary here. You can generate up to 10 client summaries at a time.
Information about fees have been published in our May Product updates.
The Super Savings information is published here.
The QSuper information is published here.
We won't charge switching fees when we roll your clients over to the new investment menu.
There will be no switch fees or buy-sell spreads incurred to members as part of the transition.
You will receive the new calculators in May. If you can’t locate the calculator after that, please contact your Business Development Manager.
We will be adding functionality in Adviser Online to cancel automatic rebalancing.
You can make unlimited switches for your clients – we have removed the cap.
From 1 July 2024, the low balance fee cap will be applied per account. It was previously applied per membership.
We are making this change to the protect the deceased member’s interests and their beneficiaries. Their potential beneficiaries cannot provide investment instructions for the deceased member’s benefits. However, many ask us to switch these into cash while we are going through the sometimes lengthy process of paying these benefits.
Our new fee structure is another step in integrating our products and services to ensure a consistent, fair and transparent fee structure for all ART members. This means all of our members will have the same administration fee structure with a weekly dollar fee and capped percentage fee.
We are committed to keeping fees competitive and have reduced the percentage fee and cap to offset the new dollar fee.
As a profit for members fund, this change is designed to make sure our fee structure is consistent, fair and transparent.
To understand how your QSuper clients’ fees are changing, you can head to our interactive fee changes calculator.
For Super Savings accounts, the fee cap will now apply to balances over $500,000, where the percentage fee will be capped at $500 (previously was $800), resulting in a maximum administration fee of $562.40.
Administration fees are currently deducted from the unit price. From 1 July 2024, they will be deducted from the member's account.
We don’t expect the admin fee changes will impact pension payments as admin fees are a small component of the Lifetime Pension pool.
For QSuper account holders, we made this change as we needed to apply a single tax rebate method for all ART members, as part of our goal to align our QSuper and Super Savings products. We considered a range of alternative tax methods and ultimately decided that offsetting members’ contributions tax with a direct tax rebate, and also sharing tax benefits indirectly with all members, was the fairest method.
This change has also been made on the back of the new single investment menu. The new menu has meant we need to stop deducting admin fees from unit prices, impacting the way we rebate tax for QSuper account holders.
This change will also help ART to comply with RG97 which requires all funds to disclose fees and premiums gross of tax. Under the current tax rebate method, QSuper deducts premiums net of a tax benefit, so disclosure to members became confusing and challenging. This change will help to alleviate this issue.
For Super Savings account holders, we have made these changes to improve transparency. Members will now be able to see the amount of direct tax rebate, whereas previously they could only calculate it by calculating the amount of contributions tax they should have paid versus what they actually paid.
This change was also made to help us simplify and lower administration costs as the previous method was impacting the way we process regular contribution files.
Additionally, this change will mean members will receive the tax benefit at the end of the financial year, not throughout the financial year, which slightly reduces their balance and potential returns in the short term. Offsetting this fact is that we are a profit for members fund, and in the long term these tax benefits experience growth while they are held in our reserve which is then used to improve the benefit for all members.
For your Super Savings client(s), the easiest way to access this information is via the Adviser Online ‘Bulk Client Report’ we publish for registered advisers at the start of each month. To find this, head to the ‘Reports’ tab in Adviser Online. If you don’t have access to Adviser Online, register here.
For your QSuper (clients), you can order a client summary.
No. In this scenario, the PEC will not be removed from the client’s insurance. On 1 July 2024, the member will have their PEC reduced to the lesser of 2 years or the client's PEC period remaining.
The investment menu changes were communicated to your clients from 18 March 2024.
All other product changes effective 1 July 2024 will be communicated to your clients during May where they will receive their May Product update. They will also have tailored communication available in Member Online which will outline all the changes that will impact them from 1 July.
The following information will be available to support your clients:
