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 is gathered from APRA quarterly MySuper Statistics as at 30 June 2024. Where our product is compared against a default lifecycle product, the captured lifestage most comparable to our membership is at age 46.

Due to the recent high levels of inflation, the MySuper (Default) investment option experienced a period of underperformance against its investment objective over the medium term (3 – 5 years). Despite this the investment option has achieved its investment objective over the 1-year period and is on track to meet its investment objectives over the long term. The default MySuper product passed APRA’s Performance Test as at 30 June 2024.

The portfolio has been constructed to achieve its investment objectives over the medium to long term, whilst reducing the sequencing risk associated with large share market drawdowns. The portfolio has exposure to active strategies and multiple forms of diversification so that it can meet its investment objectives over the medium to long term.

Risk-adjusted returns provide a clearer picture of performance relative to the risk taken. Our intentional decision to take less risk than comparable products ensures our offerings fare well even in volatile markets, acknowledge the uncertainty of future market conditions and therefore acting in the best financial interest of our members

Investment return data was gathered from the SuperRatings database as at 30 June 2024, with each investment option 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.

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 2024.36% of the Fund’s Income account options met or exceeded median performance over 1 and 5 year periods ending 30 June 2024.

However, on a risk-adjusted basis performance is significantly better across the Fund’s Choice options with approximately 70% of the Funds income account options meeting or exceeding median performance over all time periods. The Infrastructure option does not have an appropriate SuperRatings Index to compare against, however the Infrastructure option for both Accumulation and Income accounts, has met the stated PDS objective over the year ending 30 June 2024.

Higher inflation impacted returns for investment options with a shorter-term CPI+ performance objective, such as Diversified Bonds. Australian Shares and Index Growth have however achieved 1st quarter returns over the year to 30 June 2024. 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.

The analysis of investment risk shown below compares NGS Diversified (MySuper) to all other MySuper products, single strategy and lifecycle as at 30 June 2024 using the Standard Risk Measure methodology (see table below for a summary of the SRM methodology).For lifecycle products, it uses the lifestage applicable for a member aged 46, which is the average age of NGS’ default membership.

​NGS MySuper default product sits within the ‘Medium to High’ Standard Risk Measure. Within the comparator group, 51.1% had a High SRM rating, 46.7% had a Medium to High risk – the same as NGS Super, and 1 product (2.2%) had a Medium SRM rating.

The analysis completed supports the Fund’s view that the returns relative to the risk borne by the option remains appropriate for members. As a default option, it remains appropriate including the level of investment risk when compared with other MySuper products.
 

The Fund has analysed the investment risk of its diversified investment options to ensure these are consistent with the investment risk being taken by similar products in the market. This analysis compares each option to the other products in their relevant benchmark index using the Standard Risk Measure methodology (see adjacent table for a summary of the SRM methodology).

A key observation from the table below is that the SRM for each of the Fund’s products is aligned with one of the two most commonly seen SRM categories. Overall NGS products tended to have results that were on the more conservative side of average when compared to the other products in their relevant index.

 

Investment fee data was gathered from the SuperRatings database as at 30 June 2024. All 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. Both dollar-based and asset-based administration fees remain highly competitive and are below median compared with peers.

Investment fees remain above median compared with peers. The reshape of the Australian and International Equities portfolios to more passive holdings in May/June 2024 dropped investment costs significantly in May/June thereafter. In accumulation the savings banked from FY2023 to FY2024 were 0.2% for Diversified, 0.8% for High Growth, 0.3% for Balanced, 0.3% for Defensive and 0.1% for Indexed Growth. The multi asset class options (with the exception of Indexed Growth), have exposure to more expensive unlisted sectors such as infrastructure, real estate, private equity and private debt. These sectors are expected to generate superior returns to public market equivalents with lower volatility, however, the trade-off is higher cost. The placement of NGS Super's investment fees for the sector specific options is generally a story of active management versus passive management. Funds that passively manage their portfolios will consistently have lower fees than products offered by NGS Super, which have active management elements in each (the one exception being Indexed Growth, which is passively managed at NGS Super providing it with lower fees).

The dollar-based administration fee on the Funds sector specialist options has now dropped into the 3rd quartile in some sector-specific option, despite the fund not making any changes to this fee over the year. This shift reveals a trend amongst other funds, where dollar-based administration fees are reduced and offset by increased variable administrative or investment fees. While dollar-based fees apply across the whole fund, differences in ratings for different sectors arise due to different funds being present in each sector index.

Fees on both a representative member balance of $50,000 and the average account balance of $120,000 have now slipped above median fees for all pre-mixed options except Indexed Growth. This reflects a material decrease in median investment fees as high-cost funds and products have left the market. Income Accounts have also experienced a range of changes in fees in comparator funds. Sector-specific income account investment fees were all at or below comparator median, making them highly competitive in the market. However, fees for 50% of the Funds Diversified income account options are now materially above median. However, total fees for a balance of both $50,000 and $120,000 continue to be highly competitive for all sector-specific income account options, except Diversified Bonds.

Comparison data from APRA for the financial year ending 30 June 2024 showed that on a $50,000 balance, NGS Super members were charged total fees higher than the median fund, with fees of $530 (1.06%) per annum compared with $466 (0.93%) per annum for the median fund. However, since the last outcomes assessment, the difference between the fees charged by the Fund and the median has decreased. This reflects cost savings made in the fund’s investment strategy along with an average increase in the median fees of the comparator funds.

The Fund’s dollar-based administration fee remains largely in line with the comparator median. The Fund did not make any changes to this fee over the year. However, the median decreased by one dollar, driven by the continued trend of funds reducing or removing the dollar-based fees in favour of percentage-based administration fees. ​
The Fund’s asset-based administration fees remain highly competitive within the comparator funds during FY2024. The Fund did not make any changes to this fee over the year. However, the median across MySuper products increased from 0.16% to 0.21%.
 

The above graph illustrates the total fees charged on $50K and $120K accumulation account balances, for the 12 months ending 30 June 2024, which are invested in the NGS MySuper Default product option. This data has been sourced from APRA data as at 30 June 2024.

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 2024.

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 administration fee of $247 p.a.is slightly above median of $220 p.a., however the asset-based administration fee of 0.10% charged by NGS to members for the DIO is on par with the median fee charged by comparator funds.

• the percentage based brokerage is flat across all trade amounts for NGS. 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

The NGS Self-Managed Direct Investment Option will be closing. We expect the closure to be completed prior to 30 June 2025. At the closure date, all assets held by members through the DIO will be sold with all monies transferred back to their NGS unlisted investment options.
We'll be contacting members invested in the DIO with further information, key dates and details of any action they need to take. Download our Frequently Asked Questions to learn more.

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

Account:

• Accounts that are portable through different life stages: Accumulation, Transition to Retirement and Income account.
• Access to Easy Default when establishing Income account, including a two-bucket default investment strategy.
• Retirement Bonus if invested in applicable investment options, with payment of deferred tax liability to members.

Insurance:

• Default levels of cover including Death, Total and Permanent Disability (TPD) and Income Protection, to eligible members.
• Request online changes to insurance cover directly through the TAL portal via single sign on.
• Members can choose to reduce their levels of default cover or opt-out completely. Members can choose to reduce, and thereafter increase income protectiondefault cover when necessary, without requiring underwritingin line with changing work patterns.

Information, Education and Advice

• A full range of superannuation-focused advice, from intra-fund to comprehensive advice to group seminars and webinars.
• Tailored financial planning advice through NGS Financial Planning covering a member’s whole financial situation.
• 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.

When compared with other funds¹, the Fund’s default Death and Total and Permanent Disability (TPD) premiums at 30 June 2024 remained competitive for most members, noting that 72% of insured members are female with 84% of members in the Plus category.

The table and lower chart on the right illustrate that the Fund’s premiums for Income Protection (IP) at 30 June 2024 (2 yr/90 day) were higher than the median for the majority of female member cohorts within NGS Super, reflecting the Fund’s claims experience. However, early analysis of the effects of the new premium schedule (implemented in October 2024) shows that the majority of female NGS members will have Income protection cover at costs below the median once new rates are applied.

Strategies which are aimed at containing the Fund’s claims experience, whilst ensuring that members in need of insurance remain supported, continue to be an important focus of the Fund.

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.

1 Comparing against all Funds Insurance data using SuperRatings as at 30 June 2024.

NGS has determined that it will aim to contain the lifetime cost (from age 25 to age 60) of default cover at 1% of expected salary for Plus/Select members, and 1.5% of the expected salary for General members. NGS monitors the erosion effects of insurance on member accounts on an annual basis.

The adjacent table illustrates the estimated lifetime cost of cover for default members of the Plus category as at 30 June 2024. Income Protection premiums comprise around half the lifetime cost of premiums to members and increase at a higher rate than premiums of other types.

For members of the General category, the lifetime cost of cover at age 25 is 1.16% of Salary, below the tolerance level for this category.

Compared to the previous year, the lifetime cost of cover as a % of salary has decreased at all age cohorts.

The new insurance design agreed with TAL in December 2023, was implemented in October 2024 and has provided additional reductions in the lifetime cost of default cover. These changes will be fully assessed in the Financial Year 2025 Member Outcomes assessment, to be conducted next year.

Lifetime cost of default cover (Death, TPD & IP)as at 30/06/2024 (Plus Category)