Plum and Mercer have been rated as remaining well ahead of the pack as attractive destinations for corporate superannuation outsourcing, according to the latest Value for Money rating for Australian master trusts and industry funds.
However, the rating, compiled by Rice Walker Actuaries, shows that a number of players are rapidly making up ground on the market leaders. Among them are industry fund Retail Employees Superannuation Trust (REST) via its recently-established Acumen master trust product and Sunsuper through its relatively new vehicle, Sunsuper Corporate.
Nonetheless, the analysis shows that while the market is closing the gap, Plum and Mercer “still remain ahead in overall quality at this end of the market”.
Rice Walker managing director Wayne Walker says: “They can expect strong competition from the new industry fund products, as well as the established players from the banking and insurance segment, as they seek to enhance and develop their offer.”
In explaining the technical rationale behind the Value for Money chart, Rice Walker makes the point that pricing is based on more than the scales published by the master trusts and industry funds themselves. The firm specifically asks organisations to provide the pricing that would normally apply for funds of a certain size and membership.
“Having said that, the outsourcing market is robust and competitive,” says Walker. “It is not unusual for fees and service packages to be adjusted as final terms are negotiated.”
He adds that while Plum and Mercer continue to rate highly in his firm’s analysis, it is really a case of product quality versus pricing.
He says if Plum and Mercer were compared with the leading industry funds it would be tantamount to asking clients to choose between a Range Rover and a Land Rover. “And you have to let people make that choice because quite often they opt for the cost-savings they achieve with the Land Rover,” he says.
While Walker is prepared to discuss the likes of Plum and Mercer as the market leaders when it comes to master trusts and to discuss Acumen and equipsuper as being among the leading industry funds, he is loathe to discuss those at the tail of the field — those rated as most expensive and offering least value in terms of product rating.
“You can look at the chart and draw your own conclusions,” he says. “You can also draw your own conclusions about why, despite their rating, they are still in business.”
