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

Assess product appropriateness

• options, benefits and facilities
• insurance strategy and premiums
• scale and operating costs.

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

^ For eligible Accumulation Account members.

We assessed the Diversified (MySuper) option’s net returns against other single strategy and lifecycle MySuper options. The net return of the option is the return less tax, administration fees (based on a balance of $50,000) and investment expenses. We also assessed the option against its return target objective.

The net returns were higher than the median MySuper option³ over 1 and 5 years and slightly lower than the median MySuper option over 3 years.

These outcomes are illustrated in the following graph.

* Past performance is not a reliable indicator of future performance.

The option also passed both the APRA Performance Test as at 30 June 2022 and the MySuper heatmap published in December 2022.

The Choice investment option performance assessment provided the following insights:

• 50% of the Fund’s Accumulation and Transition to Retirement investment options have met or exceeded median performance for the relevant SuperRatings index over 1, 3 and 5 year periods ending 30 June 2022.
• 73% of the Fund’s Income Account investment options met or exceeded median performance over 1 year ending 30 June 2022, and 45% met or exceeded median performance over 3 and 5 year periods ending 30 June 2022⁴.
• The Infrastructure option does not have an appropriate SuperRatings Index. Returns for the Infrastructure option for Accumulation, Transition to Retirement and Income Accounts, have exceeded the stated PDS objective for the 3 years ending 30 June 2022.

The Australian and International Shares options did not meet return expectations compared to median returns for the relevant SuperRatings index over 1, 3 and 5 year periods. A re-design of these investment options was completed throughout 2022, changes were implemented which are expected to lower costs, and provide more consistent returns to improve performance for members.

Level of investment risk is measured by the number of years in which each investment option is expected to have a negative investment return over 20 years, referred to as a standard risk measure.

The level of investment risk was assessed against the standard risk measures for other fund’s MySuper options, using APRA data³ as at 30 June 2022, which included both single strategy and lifecycle MySuper products. Our assessment is as follows:

The risk level for the NGS MySuper (Diversified) option is categorised as High, aligning with the median risk level for comparable MySuper options. The level of investment risk remains appropriate for our target membership’s needs and expected returns over the longer term.

The level of investment risk for each NGS Super choice investment option was assessed against the standard risk measures for other fund’s investment options, within the relevant SuperRatings index as at 30 June 2022. All NGS Accumulation and Income Account investment options were included for the purposes of this assessment.

The level of investment risk for 16 (of 22) NGS Super choice options is the same as the median standard risk measure of other funds investment options. The level of investment risk was higher than median for 4 options, and lower for 1.

The NGS Super Infrastructure option is not included in a SuperRatings index, so a comparison to other similar funds is not available. The Infrastructure option has a Very High standard risk measure, which is assessed as appropriate for the underlying assets held and returns achieved.

We also conduct an annual investment strategy review. As part of this review, our Investments team considers each investment option’s asset allocation and whether the return and risk objectives remain appropriate based on performance achieved in previous years and forecast outlook. This detailed investment strategy review is aimed at ensuring that members continue to receive competitive returns, and that returns for investment options achieve the objective set while taking an appropriate level of investment risk.

Based on this assessment and the annual investment strategy review over financial year 2022, we have determined that the investment strategy for all the options remains appropriate for our members.

We assessed the Diversified (MySuper) option’s administration fees (account and asset-based), and investment fees paid by a member with a $50,000 account balance against other MySuper options³. Our assessment indicated that our administration and investment fees represented 1.05% of a member’s balance ($525 per annum), which is marginally above the median MySuper option of 1.03% ($517 per annum). These outcomes are illustrated in the graph below.

Based on our assessment, the total fees and costs for this option remain competitive when compared to other MySuper options, and are a fair reflection of the high level of services and support we offer to our members as well as the long-term performance returns achieved. Our assessment is that our fee strategy remains appropriate for members.

Competitor fund administration and investment fee data was gathered from the relevant SuperRatings Index as of 30 June 2022.

Based on the fees for a $50,000 account balance the observations from this assessment include:

• 82% of the Fund’s Accumulation/ Transition to Retirement Account investment options have fees equal to or below the median fees for competitor funds within the relevant SuperRatings index.
• 92% of the Fund’s Income Account investment options have fees equal to or below the median fees for competitor funds within the relevant SuperRatings index.

Source: SuperRatings investment fee information to 30 June 2022.

Based on our assessment, the total fees and costs for the Choice options remain competitive when compared to other similar fund’s Choice options, and are a fair reflection of the services we offer to our members as well as the long-term performance returns achieved. Our fee strategy remains appropriate for our members.

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 listed securities 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 2022.

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 and asset-based admin fees charged by NGS to members for use of the DIO are both around or below the median of that charged by the comparator funds
• the flat dollar brokerage fee aligns with the median for the comparator funds
• the percentage based brokerage is flat across all trade amounts, simple to understand and among the lowest of the comparator funds
• the manual transaction fee charged by NGS is not a fee applied by 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.

We offer our members:

• a full range of super-focused advice services
• face-to-face meetings in our state-based offices, their workplace, or other locations
• extended hours helpline including inbound and proactive outbound calls, and tele-advice
• personalised insurance claims support
• information accessible across multiple digital sources
• online account facilities to apply changes to investment options, pension payments and also to insurance cover directly through the TAL portal
• access to e-Advice and a Super retirement calculator
• accounts that are portable through different life stages.

The Fund completed an insurance re-design and rerate process in November 2022 with the Fund’s insurer, TAL, to implement changes to the default insurance benefits provided to members with a focus on ongoing appropriateness to members.

The following key observations were based on SuperRatings data for other funds with similar insurance designs, and are for insured members with a Plus insurance category (representing approximately 85% of our insured membership):

• 82% of age-based premium rates for death insurance are below the median of other MySuper funds.
• 100% of age-based premium rates for TPD insurance are below the median of other MySuper funds.
• When compared against other industry funds that offer IP cover with a 2-year benefit and a 90-day wait, our IP premiums tend to be higher than median for the majority of ages, reflecting the Fund’s membership profile and claims experience.

Based on our assessment, overall the cost of insurance cover provided to members remains competitive.

Following the insurance design review in 2022, our assessment determined that the insurance strategy is appropriate to the Fund’s members and the cost of cover provided by NGS Super to its members remains affordable.

Erosion of retirement balances of less than 1% of a member’s average salary over their lifetime, from age 25 to retirement, is a guiding principle used in reviewing insurance premiums. Following the insurance design review, changes to insurance premiums resulted in a lifetime cost of cover under this 1% threshold.