CFS FirstChoice Employer Super

We assessed whether the fees and costs paid by FCE members (administration fees, and total fees & costs) are competitive. In doing so, we used segmented member data to evaluate the fee and cost outcomes across the membership. 

We assessed the level of investment returns delivered to members after the deduction of fees, costs and taxes. 

We assessed whether the investment volatility of each investment option was appropriate for the risk profile of the investment. 

We worked with an independent research house to benchmark the quality of our member services against 40 key industry peers. The overall finding of the review was that FCE member services are ranked better than the median. 

We assessed the performance of each investment option having regard to the stated investment objective and investment ratings given by various research houses. We also considered the suitability of the composition of the investment menu for members.  

To evaluate the appropriateness of the insurance strategy for FCE, we used AIL’s Annual Insurance Review for 2023, which was conducted by an independent research house. The report concluded that FCE Insurance terms and conditions are quite reasonable and competitive with other funds. Overall, the conditions are slightly more favourable than its competitors.  

It was also assessed that the claim processing time for 86% of Death, 84% of TPD & 70% of IP insurance claims are better than APRA’s average processing time. 

AIL’s Annual Insurance Review for 2023, found that across Death and TPD (Total and Permanent Disablement), Death Only and Income Protection, more than 77% members are paying insurance premiums that are ‘at median or cheaper’ in comparison to the industry/peers. 

It is estimated that the average member pays premiums which are 0.8% of their salary and more than 73% of members are paying premiums that are less than 1% of their salary. 

Scale is important as it allows AIL to meet its commitments and negotiate competitive arrangements for members. As at 30 June 2023, based on APRA’s Annual fund-level superannuation statistics, AIL was the 7th largest provider of superannuation in Australia with total super assets of approximately $110 billion and a membership of approximately 821k members.  

As at 30 June 2023, FCE had superannuation assets of $14 billion and a membership of 197k members. 

100% of FCE investment options held assets of more than $30m and therefore did not have any imminent last man standing risk. 

As at 30 June 2023, based on APRA’s fund level data, AIL’s superannuation operating cost ratio was ranked among the lowest in the industry (1st quintile). AIL’s operating costs have increased over the last few years due to regulatory  compliance and aging infrastructure costs. However, a number of projects are underway to further automate and streamline our processes, and improve our technology platforms, which are expected to stabilise AIL’s operating costs in the longer term. 

Dividend payments that were paid to our parent companies were made in accordance with AIL’s Capital and Dividend Policy, which requires that the amount and timing of any dividend is consistent with AIL’s fiduciary duties and members’ best financial interests. 

We confirmed the appropriateness of each category of fee and cost charged to members.  

The fees and costs paid by FCE members were assessed as being sufficient to cover the costs of the product and that the manner in which fees and costs are charged to members is appropriate.