Our Member Outcomes Assessment for the year ending 30 June 2021
We, along with all other super funds, are required to assess our performance against set measures each year. We use that assessment to determine that we’re looking after the financial interests of our members. You can read the determination on our performance below.
As a fund created to deliver the outcomes our members need and want, our member focus is central to who we are. Our structure, our operations and our leadership are all informed by our members and their work. Their needs drive every part of our strategy, our brand and our culture.
HESTA has assessed each of the products we offer:
In conducting our comparative analysis, we benchmarked our products (excluding the transition to retirement income stream1) against other products in the market.
The analysis also took into account our deep understanding of our members’ characteristics. The unique characteristics of our fund inform our strategy and enable us to connect with our members through personalised communication.
To ensure everything we do as a fund continues to be in the best interest of members, we’re required to assess our performance annually against a range of key factors including:
In assessing outcomes for members, we’ve drawn a balanced comparison of products and services provided by other funds using publicly available data from the Australian Prudential Regulation Authority (APRA) and independent ratings agencies such as Chant West and SuperRatings.
MySuper |
Choice (accumulation) |
Choice (income stream) |
1 Part way through the assessment period, on 1 October 2020, the transition to retirement income stream (TTR) investment options were closed and aligned to those in the Choice (accumulation) investment options. This change was designed to streamline and align our investment options available in our taxed investment portfolio. Benchmarking against peers for TTR products is currently not possible due to the lack of available data to compare TTR products.
Through our analysis, we have determined that the financial interests of members are being promoted for our products.
This is great news for our members. The thorough analysis we’ve undertaken shows their retirement savings are in safe hands.
In fact, HESTA members continue to be some of the most engaged super members in Australia – so they’re taking as keen an interest in their super as we are in taking care of it!
And they’re also some of the most tech savvy, as significantly more HESTA members receive electronic or mobile communication from us than members of other funds. They’re also great at checking in on how their super’s going, with the majority choosing to receive their statements online.
We aim to deliver solid, long-term returns, and we achieve this by investing in a way that supports healthy returns, healthy people, and a healthy planet we can share with future generations.
Every aspect of our investment strategy is informed by our focus on investing for strong long-term returns and doing it responsibly, knowing the importance of each decision to our members’ future financial health.
Our HESTA MySuper product (Balanced Growth), is designed with our members’ needs in mind. It’s invested in a diverse but balanced mix of assets to align with the long-term nature of super. It aims to provide high enough returns over the long term to help them achieve a more comfortable retirement lifestyle. Most of our members are invested in Balanced Growth.
The outcomes of a review of our Choice investment options were implemented in October 2020. The changes were driven by a desire to simplify choice for members, ensure naming conventions of our investment options were true to label and align Choice investment options across products to minimise the complexities of transitioning between accumulation and income stream products.
These changes strengthen our investment menu. Based on the performance of investment options in our products against comparable products in the market, HESTA has determined that the investment strategy in the HESTA MySuper, HESTA Choice (accumulation) and HESTA Choice (income stream) products remains appropriate for those members.
MySuper | Choice (accumulation) | Choice (income stream) |
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The analysis finds that the setting of fees on a cost recovery basis is appropriate for members currently invested in HESTA products.
For this assessment period, all fees charged to HESTA member accounts are set on a cost recovery basis. They are deducted from member accounts and retained in fund reserves to cover expenditure for the benefit of all HESTA members (and in accordance with reserving policies).
MySuper |
Choice (accumulation) |
Choice (income stream) |
Fees and costs for a member with a $50,000 account balance are in the second quartile when compared to equivalent MySuper products according to Chant West. |
For most of the Choice (accumulation) options, fees and costs for a member with a $50,000 account balance are in the top two quartiles when compared to equivalent choice (accumulation) products according to Chant West. |
Fees and costs for a member with a $50,000 account compare favourably against comparable products across most of the Choice (income stream) options according to Chant West. |
HESTA services are appropriate when compared with those of equivalent funds and are well-used by members. In reaching this finding, we’ve also considered the fees and costs charged to HESTA members to pay for the provision of these services.
Services provided by HESTA are available to all members regardless of the product they hold. These include:
Our analysis finds that, taking into account the characteristics of the members in our accumulation products, our insurance strategy and fees remain appropriate for those members.
Our insurance benefit design carefully considers our members’ needs.
The majority of our members hold Standard Cover, which is:
We are one of only a minority of super funds to offer income protection as Standard Cover because we find it leads to more members overcoming temporary disabilities and getting back to work faster. Total and Permanent Disability Cover is available as voluntary cover only.
Our Standard Cover is designed to provide a basic level of insurance that:
The insurance benefit design also has the flexibility to meet more specific insurance needs that may not be met by the Standard Cover. This includes the ability to increase cover without having to provide full medical evidence, in some instances.
In March 2021, in response to the increasing cost of group insurance premiums, we changed the default Income Protection offer from an ‘up to age 67’ benefit payment period, to an ‘up to 5 year’ payment period. This allowed us to maintain affordable insurance for our members.
The trustee has determined that the scale and size of HESTA’s business is an advantage for our members. It allows us to provide services to members at low or no additional cost.
When compared against most funds in the market HESTA performs better than the benchmark in most metrics:
HESTA continues to grow, which means investment fees naturally decline over time as funds available for investment increase. This enables our investment team to leverage our size and reputation in negotiating lower fees with external managers.
With over 930,000 members and close to $68 billion in assets, we can use our scale and size to deliver great value to all our members.