Two more funds have gained MySuper authorisation so far this week, with Colonial First State securing the first authorisation for a retail provider.
Colonial First State will launch a MySuper product for ‘FirstChoice Employer Super’, a fund for employers of small to medium businesses.
As a result of the MySuper legislation, Colonial First State will no longer provide a range of default investment options (it currently offers eight) with different growth and defensive allocations which can be chosen by an employer to match a plan’s demographics.
As a replacement, a MySuper product must either have a single diversified investment strategy or lifecycle approach. Colonial First State will offer a lifecycle approach known as ‘FirstChoice Lifestage’. FirstChoice Lifestage is specifically developed for members born in the same five year age group who typically need a similar investment strategy.
“When a member joins the fund and they have not selected another investment option, they will be placed in the FirstChoice Lifestage option that matches their date of birth,” said general manager of product and investments, Peter Chun. “As a member gets older the level of investment risk of the option gradually reduces. This aims to reduce the impact on their retirement savings in the event of substantial falls in investment markets as members near retirement.”
Club Plus Super, an industry super fund with more than 100,000 members across Australia, has also gained approval from APRA to offer MySuper.
CEO Paul Cahill said that, “While employers don’t have to do anything immediately, they should begin to familiarise themselves with their obligations under the coming StrongerSuper reforms.”
Superannuation and investment software provider Financial Synergy is also jumping on the MySuper train, announcing the imminent release of an updated version of its Acurity administration platform.
The provider has worked closely with its client base of more than thirty funds across the country to finalise solution designs and help ready their clients for the Government’s upcoming changes.
Shane Collister, TelstraSuper’s general manager of technology solutions, kept an eye on progress of the solution during its development. “Financial Synergy has always been great in consulting on our requirements for legislative change, and getting us the new software version in enough time to allow us to devise and test our new business processes,” he said.
Financial Synergy CEO Stephen Mackley said the release would give Acurity users as much time as possible to test and ready themselves for the significant changes in the industry. Financial Synergy has announced it will finance development costs entirely from normal ongoing licensing revenue.