We are pleased to advise that AvSuper and Australian Retirement Trust (ART) have agreed to enter into a Heads of Agreement (HOA). The HOA confirms the intention of both parties to proceed with the merge in good faith. It’s a critical and positive step forward in serving our members best financial interests and comes after an extensive due diligence process. The merger is expected to be completed on 30 April 2024.

There’s still a lot of work to be done before the merger takes place. Our working groups are continuing to plan and commence activity for this transition behind the scenes, including organising the transfer of the Defined Benefits accounts to ART.

We will continue to keep you informed of progress via webinars, Member Updates and our website.

Additional questions asked at the webinar

Our Director and Executive salaries are disclosed annually both on our website and in our annual report.

AvSuper’s fees are disclosed in detail, both on the website and in our Product Disclosure Statements.

AvSuper is an all profit to members fund. Our fees are a transfer of costs we incur, either from investing members’ money or running the fund.

Our administration fees are used to cover the operating and administration costs of the fund. We tightly manage those costs and have been able to make some reductions over the last few years. We introduced an administration fee cap in September 2021. In December 2022 we cut our account based weekly fee to $0.50.

Investment fees represent the cost of investing. They are the amounts paid to the Investment Managers we employ, stamp duty, brokerage custody and asset consulting. Over the last few years, we have made some changes within the portfolio to reduce some costs to members as well.

As an all profit to members fund, our costs reflect the cost of investing members’ money or the cost of running the fund.  The reduction in fees charged to members in recent years have resulted from some of the changes made in the ongoing operations of AvSuper.  In recent years there have been changes to our administrator, investment managers, investment strategy and business structure.

Unfortunately we don’t have a crystal ball and cant answer this question, but clearly there has a large increase in the official cash rate over the last  eighteen months.

We are focussed on delivering value to members and have been able to reduce administration fees in recent years.  That said, there are some large, fixed costs in running a super fund which are reflected in our fees. In transition to ART those fixed costs are spread amongst a larger group of members, so you can expect your fees to either stay the same or reduce. Based on our analysis across investment options, ART can enjoy benefits of scale in fees and costs that AvSuper currently cannot access.

AvSuper and ART are assessing the current insurance arrangements that AvSuper members have.  Corporate cover will likely remain the same. As more information becomes available we will let members know.

AvSuper and ART are working through the merger detail.  As more information becomes available we will let members know.
In regards to members investment strategies, we have looked at ART’s investment options as part of due diligence among other things. Members will be mapped to the ART option most closely resembling the AvSuper option or options the member is currently invested in. As we move closer to the SFT, you will have the opportunity to learn more about the investment options that will be available to you through ART and receive guidance on their suitability to your circumstances.

The declared Cash Option rate reflects the full year of investment and is made up of variable deposits, bank bills as well as term deposits (which are fixed). When a deposit is fixed and rates rise over that period, the option  receives the fixed rate return for that deposit rather than the current rates offered at a bank. This lag  results in a lower weighted return for the option when rates rise compared to and generally a higher return when rates fall. There were nine rate rises in the 22/23 financial year. The current returns for the option should be closer to what would be offered by a bank based on today’s rate, although we still have some fixed deposits which have not yet matured.

The other component which causes a difference will be costs of custody and administration, which are netted from the Cash option’s return and wont be in the bank’s published gross deposit rates.

We’ve done the due diligence, and comprehensive analysis. This is a large project and there are still some gateways to pass through before the SFT with Australian Retirement Trust but we anticipate the merger will occur in April 2024.

The unit price used at SFT will reflect the value of the assets in each option at that time.

ART has considerable DB capabilities. The AvSuper DB Scheme will be maintained by ART with the same rules that it has now.

We are aware of a number of members that have accounts with both funds. Discussions with ART are ongoing and we will keep members informed when more information becomes available.

AvSuper and ART are assessing the current investment options that AvSuper members have, and seeking to identify the closest match for those investment options that are available among ART’s range of options.  When the transfer occurs, members will be mapped to the ART option most closely resembling the AvSuper option or options the member is currently invested in.

As we move closer to the SFT, you will have the opportunity to learn more about the investment options that will be available to you through ART and receive guidance on their suitability to your circumstances.

Had we proceeded with CSC, there is no guarantee that we would be any further along in the process than we were when it ended. As you recall, we had successfully moved through due diligence and were awaiting government legislation to pass that would allow CSC to take on non-government members.

The delay to this legislation meant there was no certainty to when the merge would be finalised. In fact, as of today, that legislation has still not been scheduled to go to Parliament for a decision. We would still be waiting. It has always been a priority to get a merge completed as soon as possible and the uncertainty around timing with CSC still exists.

In the initial EOI process, we had a number of excellent choices that made our shortlist, ART being one of them.  ART had retained an interest in merging with AvSuper, and given they met our criteria, we saw them as an excellent alternative.

Australian Retirement Trust
As the second largest superfund in Australia, ART was created in Feb 2022 from the merger of two Queensland-based funds, QSuper and Sunsuper. At present, their member base is 2.2 million and they manage over $240 billion in members’ funds. Just like AvSuper, ART offer defined benefit, accumulation and income stream accounts, and a solid performance history. Similar to AvSuper, ART offers insurance and financial advice to their members and has won a number of customer service awards.

Investment performance
For the 2022/23 financial year, AvSuper’s Growth (MySuper) investment option returned 11.4% for accumulation members, and the Balanced Growth Option returned 9.2% for pension members.

In a year of continuing market volatility we achieved improved performance across all investment options. Whilst we all appreciate that there will be the occasional year of negative returns in any long-term investment strategy, we are still happy to leave them behind and return to positive territory.

Annual Report now available
From navigating the complexities of a merger to lifting investment performance out of a negative year, we have been working tirelessly to secure the best outcome for members.

Read the 2022-23 Annual Report.

Annual Statements
Annual Statements will be available in AvSuper Online (AOL) in September. You will be notified by email/post when they are available to download.

Check your statement to ensure your personal details are correct, including your nominated beneficiaries. Ensure your super ends up in the right hands if something were to happen to you, by making a binding beneficiary nomination. Find out more at avsuper.com.au/beneficiaries

Change in operating hours
We reviewed the call activity over the past year and found that we received only 100 calls between 5pm and 6pm in that time period. As a result, we made the decision to change our operating hours to end at 5pm AEST now, instead of 6pm.

If you have any questions about any of the above, please contact us on 1300 128 751 or email us at avsinfo@avsuper.com.au