On the road again
The recent ASFA Policy Roadshow in Canberra showcased an impressive panel of speakers and MC: (five here pictured left to right):
- Larissa Evans, acting assistant commissioner, fund services and engagement, ATO
- Anne Maree Howley, ombudsman, AFCA
- Eve Brown, senior manager, APRA
- Nicole Mitchell, manager, retirement benefits unit at treasury
- Jane Eccleston, senior executive leader, superannuation, ASIC
Plus, (not pictured) Leeanne Turner, CEO MTAA Super was MC and Fiona Galbraith, director of policy ASFA, also spoke.
NAB Super FX Survey says funds plan more offshore allocations
NAB has launched its 9th biennial Superannuation FX Hedging Survey, which examines the hedging techniques of 61 Australian superannuation funds.
The findings reveal Australian superannuation funds are increasing their share of offshore investments as they seek to diversity and boost returns. Currently on average, funds have 41 per cent of their assets offshore, with 72 per cent planning to increase this over the next two years and considering unlisted assets such as private debt, infrastructure and real estate.
“The results show that at the same time that funds are increasing their offshore holdings, they are hedging less of their FX exposure to take on more FX risk,” said Drew Bradford, NAB Executive General Manager Markets.
The results also showed that funds are increasingly using target percentages for their foreign currency exposure, rather than traditional hedging ratios and that internal investment teams are playing a more influential role in setting strategy for currency decisions.
“This survey is a poignant snapshot of what Australian superannuation fund managers are thinking and how they plan to approach investment strategy and foreign exchange risk in the low interest rate world,” Bradford said.
Mercer says Grattan is wrong about super
A campaign by the Grattan Institute against lifting the Superannuation Guarantee rate to 12 per cent is based on a “misleading” model, according to a report by Mercer senior partner Dr David Knox, who says:
“In light of the recent announcement of a review of Australia’s retirement income system, it is vital to counter misleading conclusions to ensure all discussion and debate is grounded in reality and typical behaviour.”
Dr David Knox says Grattan’s findings are based on a series of flawed assumptions, such as:
- that workers are single when they retire – 70 per cent have a partner and will therefore get a lower age pension than assumed by Grattan
- that everyone will work until age 67 – many retire before this
- no allowance being made for half the population living beyond the age of 92.
Dr Knox said Grattan’s sole focus on retirement income also failed to consider the need for flexibility to provide retirees with access to capital, an important feature of retirement products.
NGS Super adopts Australian Asset Owner Stewardship Code
The voluntary Australian Asset Owners Stewardship Code (‘the Code’) is principles-based and designed to increase the transparency and accountability of stewardship activities in Australia. The Code provides guidance to asset owners and their approach to stewardship; in a manner that is reflective of their size, resourcing, membership and investment policies.
Under the new Code, signatories are obliged to publish a Stewardship Statement on their website to illustrate how they intend to comply with the core principles of disclosure, exercising voting rights, company engagement, financial system advocacy, monitoring of asset managers.
NGS Super CEO, Laura Wright said that the fund is in full support of the six principles outlined in the Code and believes it will protect NGS Super members, while also enhancing long-term value.
Financial equality is more than a generation away
According to the latest Financy Women’s Index, Australian women are well over a generation away from achieving financial equality. Progress has slowed over the past financial year, despite a record narrowing of the superannuation gender gap.
The FWX Progress Target is an aspirational guide on economic equality and is calculated by benchmarking women against men from data collected in 2012, which is the baseline for this Report.
The Women’s Index rose 0.5 points to 123.9 points in the June quarter, from a revised 123.4 points in the March quarter of 2019.
While women’s economic progress has improved 5 points over the 2018-19 financial year, it’s less than the 7.5 point gain recorded in the 2017-18 financial year when the score rose to 118.9 points from 111.4 points.
Overall, when the annual pace of progress recorded by the Financy Women’s Index is compounded and compared to the revised (FWX) Progress Target of 172 points, it shows that on the basis of current trends, Australian women are 45 years from achieving economic equality.
“It is pleasing to see progress being made on the Financy Women’s Index in the June quarter, albeit slowly,” said Deloitte Partner Nicki Hutley.
“However, as the mother of three girls, the thought that genuine economic equality is well over a generation away is disheartening. I would like to see further efforts on the part of policy makers and organisations to see greater strides made more rapidly,” she said.
Unlike previous quarters, the biggest factors that held back women’s economic progress in the June period included a moderation in female full-time employment growth and a lack of action by corporate Australia to improve the representation of women on the boards of the top 200 listed companies.
The latest superannuation balance data by gender from the Australian Bureau of Statistics (ABS) shows that in the 2017-18 financial year, the gender gap has narrowed to 28 per cent, from 34 per cent in the 2015-16 financial year.
“It’s great news that the super gender gap has fallen to its lowest point, but this is being driven largely by women’s increased workforce participation,” said AMP Financial Planning adviser Dianne Charman.
“The super gap widens significantly by 45 years of age because of time spent out of the workforce raising children, so women still need to have a plan for making extra contributions later in their working life,” said Charman.
Sunsuper has awarded its first green bond mandate
Sunsuper has awarded its first green bond mandate to London-based impact fixed income manager, Affirmative Investment Management (AIM), with an initial investment of A$150 million.
The mandate’s objective is to deliver a mainstream financial return while providing financing to generate positive environmental and social impact projects. AIM will deliver an annual impact report to provide investors with transparent measurement of the positive impacts of bond-funded climate change mitigation and adaptation, and global sustainable development, with details of the financial returns achieved from the mandate’s bond portfolio.
Sunsuper’s Chief Investment Officer Ian Patrick said: “As an organisation, we have long considered the science behind climate change as settled. We recognise that from an investment perspective, a just transition to a low-carbon global economy presents both risks and opportunities.”
Christian Super introduces new ethical index shares option
Christian Super has become the first superannuation fund in Australia to offer an ethically screened index shares investment option, in response to feedback from their values-aligned financial advisor network.
The Ethical Index Shares option is comprised of 50 per cent Australian shares and 50 per cent international shares, with an annual investment fee of 0.30 per cent and an indirect cost ratio of 0.08 per cent.
Christian Super has also launched a new Ethical Growth Plus investment option, with an 84 per cent allocation to growth assets, and an investment objective of 3.5 per cent above inflation over a 10 year period. 12 per cent of the assets in this option are allocated to impact investments, the highest out of the fund’s 8 investment options.
