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Personal Pension Plan

 Each year, along with other superannuation fund Trustees, we're required to publish the results of an annual member outcomes assessment for each of our products. This assessment shows how we’ve promoted the financial interests of our members over the prior financial year.

MEMBER OUTCOMES ASSESSMENT – APPROACH

Each year we set, and then assess ourselves against, a number of key focus areas we believe are important in providing a high quality superannuation fund. We’ve completed a three-step evaluation process to assess our performance against the key focus areas:

Product comparison
We’ve compared Personal Pension Plan against similar superannuation funds to show whether the product is competitive with similar products. We completed this comparison in the areas of fees, investment performance return and investment risk.

Product assessment
We’ve assessed key areas of Personal Pension Plan that are related to member outcomes to determine whether we’re promoting the financial interests of our members. A summary of the results is completed at the product level.

Overall product determination
Finally, we’ve made an overall determination on whether we are promoting the financial interests of our members in Personal Pension Plan. This assessment is based on the matters assessed and also factors in anything relevant within the business or externally.

OVERALL PRODUCT DETERMINATION FOR THE YEAR ENDED 30 JUNE 2020


The Personal Pension Plan is competitive with its peer group across fees, investment return and risk-adjusted return.

However, some of the product’s assessment areas are below benchmarks we have set. This includes outcomes such as the limited investment menu available in Personal Pension Plan, the current scale of Personal Pension Plan which is smaller than most other funds, and as expected for a product designed to pay pensions to its members, a decline in member numbers and net outflow of cash from the fund. On balance, this indicates that the financial interests of members who hold the Personal Plan Pension product are not currently being promoted by us.

To address this, we are working on a proposal that will ensure the members in Personal Pension Plan are supported in a larger fund with increased scale and features. This is due to be communicated to members during 2021.

PRODUCT COMPARISON

Fees and costs
We aim to provide competitive fees for members and regularly review our fees to improve the financial outcomes for our members. The fees and costs for Personal Pension Plan were reduced effective 1 June 2020 and following the reduction are better than most (85% of) similar funds. The fees for Personal Pension Plan depend on the portfolio of investment options chosen by the member.

Net investment return
We support members achieving their retirement goals by offering members the choice of investment options. On average, the return for each investment option within Personal Pension Plan performed better than three-quarters (77%) of comparable investments. The investment returns for Personal Pension Plan depend on the portfolio of investment options chosen by the member.

Investment risk
All investments are subject to risk, and different strategies carry different levels of risk depending on the assets that make up the strategy. On average, the risk-adjusted return for the investment options within Personal Pension Plan performed better than three-quarters (81%) of comparable investments.

PRODUCT ASSESSMENT

This assessment evaluates the performance of Personal Pension Plan in delivering outcomes for our members. Each of these areas are assessed by comparing a range of metrics against relevant benchmarks.

KEY AREA
Fees and costs
The fees and costs for Personal Pension Plan were reduced effective 1 June 2020 and following the reduction are better than most (85% of) similar funds. The fees for Personal Pension Plan depend on the portfolio of investment options chosen by the member.
Options, benefits and facilities Our members are regular users of key options, benefits and facilities including digital services and our contact centre. Member communications provide an important role in supporting and educating members. We continue to explore opportunities to engage with our members via digital channels, this includes continual investment in our member app which was launched in April 2020. We regularly add new features in response to your feedback. We also continue to make it easier for you to manage your super by simplifying process, including the digitisation of forms – over 75% of our forms are now digitised.
Investment strategy Half of the investment options met their investment objectives. Whilst the investment menu of Personal Pension Plan is more limited than its peers, it covers most major asset classes and offers sufficient choice for diversification of a member’s portfolio
Scale and sustainability Personal Pension Plan has around $200m in investments which is less than many other funds. The options in Personal Pension Plan invest with other members of the Rollover and Superannuation Fund as part of a large pool of around $2.5B to ensure members benefit from the overall scale of the fund. Personal Pension Plan experienced a decline in membership in the year ending 30 June 2020 and, as expected in a product designed to pay pensions to its members, experienced a net outflow of cash from the fund. We are working on a proposal that will ensure the members in Personal Pension Plan are supported in a larger fund with increased scale. This is due to be communicated to members during 2021.
Operating costs We take managing member’s money seriously and are disciplined in our management of the fund’s operating expenses. This fund leverages and has the benefit of the broader administration scale of CFS which manages approximately $145bn. Our assessment of costs considers what we planned to spend and what we did spend. For the year ending 30 June 2020, the Trustee spent more than planned across the business, which supported our ongoing investment in our product and services and other measures to maintain our operations. This additional investment was not passed onto members.

We will continue to improve member outcomes by understanding members’ needs, enhancing the product offering and remaining focused on delivering for members’ financial interests.