Member outcomes assessment

We assessed our performance against the following key areas:

Measure and compare products

• investment performance
• level of investment risk
• fees and costs

Appropriateness of product

• options, benefits and facilities
• investment strategy
• insurance strategy and fees
• scale and operating costs
• fee strategy

For both MySuper and Choice we offer our members the same administration fees, insurance^, options, benefits and facilities.

^ For eligible Accumulation Account members.

Investment return data was gathered from APRA Quarterly MySuper Statistics as at 30 June 2023 are used for comparison. Return comparisons were made over 1, 3 and 5-year periods, against all fixed SAA MySuper products and lifecycle MySuper products (using the lifestage most closely aligned to the average age of the NGS MySuper membership — age 46). In total, 64 MySuper products are included in this comparator group.

The Diversified (MySuper) option achieved market returns (2nd or 3rd quartile) across all 1, 3 and 5 year periods.

Over 5 years, the Diversified (MySuper) option achieved an excess net benefit of $692 for a representative member with a balance of $50,000. Excess net benefit from SuperRatings as at 30 June 2023 uses net returns and is after fees.

The option also exceeded its investment objective of CPI+3% in all periods and passed APRA’s Performance Test as at 30 June 2023.

As part of the broader member product offering, the Board concludes that the Fund’s MySuper product investment returns support the determination that the Fund promotes the financial interests of the beneficiaries.

Investment return data was gathered from the SuperRatings database as at 30 June 2023.

Investment options were mapped to the most relevant SuperRatings Index, and return comparisons were made over 1, 3, 5 and 10 year periods (where available) against all options in the relevant index.

Fees and returns comparisons for Choice options were completed by assessing them against all options in the relevant SuperRatings Index, to determine their performance relative to competitors over 1, 3, 5 and 10 year periods (where available).

Approximately 40% of the Fund’s Accumulation options have met or exceeded median performance for the relevant SuperRatings index over 1, 3 and 5 year periods ending 30 June 2023.

45% of the Fund’s Income account options met or exceeded median performance over 1 year, and 36% met or exceeded median performance over the 5 years ending 30 June 2023.

However, on a risk-adjusted basis performance is significantly better across the Fund’s Choice options particularly over 5 and 10 years. The Infrastructure option does not have an appropriate SuperRatings Index, however the Infrastructure option for both Accumulation and Income accounts, has met the stated PDS objective over the year ending 30 June 2023.

80% of the Fund’s options have met or exceeded the stated PDS performance objectives. The exceptions were the Australian Shares and Diversified Bonds options. Higher inflation impacted returns for investment options with a shorter-term CPI+ performance objective, such as Diversified Bonds. Australian Shares has however achieved 1st quarter returns over the year to 30 June 2023. The Fund regularly monitors investment option performance and the PDS objectives for appropriateness.

All Trustee Directed Products have passed the APRA performance test.

As part of the broader member product offering, the Board concludes that the investment returns for each of the Fund’s Choice products support the determination that the Fund promotes the financial interests of the beneficiaries.

Standard risk measure, return target, and net return data was gathered from the APRA Quarterly MySuper and Annual Fund-Level Superannuation Statistics reports as at 30 June 2023.

Comparisons were made against the Risk Level of all fixed SAA MySuper products and lifecycle MySuper products using the life stage closest aligned to the average age of the NGS MySuper membership (age 46). The comparator group, comprised of 64 MySuper products.

Within the comparator group, 68% had the same Risk Level range as NGS (High). 3% had a higher Risk Level (Very High), and 30% had a lower Risk Level (Medium or Medium to High). Risk Level is a measure of the number of expected negative returns in a 20-year period.

As part of the broader member product offering, the Board concludes that the Fund’s MySuper product level of investment risk supports the determination that the Fund promotes the financial interests of the beneficiaries.

We review the investment strategy for our options regularly, to check that the level of investment risk and the return target are appropriate. For the period ending 30 June 2023, it has been determined that the investment strategy for our choice products are appropriate for members in those products.

As part of the broader member product offering, the Board concludes that the Fund’s Choice products level of investment risk supports the determination that the Fund promotes the financial interests of the beneficiaries.

Investment and administration fee data was gathered from APRA Quarterly MySuper Statistics as at 30 June 2023. Fees were assessed as the fees charged for the 12 months to 30 June 2023.

Comparisons were made against the fees of all fixed SAA MySuper products and lifecycle MySuper products using the lifestage closest aligned to the average age of the NGS MySuper membership (age 46).

The fees for the Diversified (MySuper) option, including investment and administration, are slightly above the comparator median. The administration fee components were below the comparator median.

The investment fee component was above the median fund by 0.24%, which was somewhat offset by the asset-based fee, which was below the median fund by 0.06%. This reflects the tailored investment strategy which includes a higher allocation to unlisted assets expected to deliver superior long-term returns.

On a $50,000 balance, NGS Super members were charged total fees are higher than the median fund, with fees of $540 (1.08%) per annum compared with $450 (0.90%) per annum for the median fund.

As part of the broader member product offering, the Board concludes that the Fund’s MySuper product fees support the determination that the Fund promotes the financial interests of the beneficiaries.

Investment fee data was gathered from the SuperRatings database as at 30 June 2023.

Investment options were mapped to the most relevant SuperRatings Index in order to undertake comparisons for comparable funds.

Administration fees, being fund-wide, are the same as for the MySuper option.

All investment fees for pre-mixed accumulation and income account investment are at or above the median (3rd Quartile) for the relevant index except Index Growth. All investment fees for sector accumulation and income account investment are below the median for the relevant index except Diversified Bonds.

The total fees paid by Fund members for a balance of $50K and the average balance of $120K are at or above the median (3rd Quartile) for all accumulation and income pre-mixed investment options except Indexed Growth. while all fees for sector options are below the median excluding Diversified Bonds.

As part of the broader member product offering, the Board concludes that the Fund’s Choice product fees support the determination that the Fund promotes the financial interests of the beneficiaries.

The NGS Self-Managed Direct Investment Option (DIO) allows members to choose and manage their own investments. They can invest in a range of listed securities, including stocks in the S&P/ASX 300 Index, selected Exchange Traded Funds (ETFs) and term deposits.

The level of investment risk and expected return will vary depending on a member’s portfolio and therefore has not been benchmarked in terms of actual performance delivered in the year to 30 June 2023.

The fees and costs charged to members for use of the DIO have been benchmarked against a selected peer group of other industry super funds that offer a similar product. Fee levels remain competitive and represent good value for money for members of NGS Super, noting:

• the dollar-based admin fee of $247 p.a.is slightly above median of $230 p.a., however the asset-based admin fee of 0.10% charged by NGS to members for the DIO is below the 0.13%median fee charged by comparator funds.
• the percentage based brokerage is flat across all trade amounts. Comparator funds apply a tiered brokerage structure
• the manual transaction fee charged by NGS does not apply to the comparator funds assessed and
• NGS does not apply a cash account fee or other expense allowance, these fees are applied by some but not all comparator funds.

Key features of the Fund’s options, benefits and facilities include:

• accounts that are portable through different life stages: Accumulation, Transition to Retirement and Income account
• a full range of superannuation-focused advice, from intra-fund to comprehensive advice to group seminars
• state-based offices with education and advice staff to meet face to face with members in our office, their workplace or other locations
• an extended hours helpline including inbound and proactive outbound calls, and tele-advice
• personalised insurance claims support
• information across multiple digital sources
• online account facilities via web browser and mobile app, that allow members to apply changes to investment options, provide access to e-Advice and a Super Retirement Calculator.

The Fund’s insurance strategy incorporates a needs-based design which is aligned with the target membership. The Death / TPD design considers financial needs at different life stages, whilst the Income Protection (IP) design aligns with salary scales for the target membership. The Plus category (84% of insured members) offers Death / TPD premiums which are lower than the median fund for 96% and 100% of female and male members respectively.

Following completion of the insurance design review in November 2022, the default IP benefit period was reduced from 5 years to 2 years to align more closely with Fund members’ claims experience, while balancing the financial needs of disabled members with the costs of default cover. The reduction to the IP benefit period for default members resulted in a reduction to premium costs with no reduction to the amount of cover provided.

As part of the broader member product offering, the Board concludes that the insurance strategy and fees support the determination that the products promote the financial interests of the beneficiaries.

NGS has determined that it will aim to contain the lifetime cost of default cover (from age 25 to age 60) at 1% of salary for Plus/Select members, and 1.5% of salary for General members. The insurance re-design completed in November 2022 resulted in a decrease in the lifetime cost of default cover across all cover types, and a resulting lifetime cost of cover of just 0.80% at age 25. Further the lifetime cost does not exceed the 1% tolerance level until age 45.

NGS will continue to monitor the insurance product design during 2024 and the cost of cover for ongoing appropriateness to members.