Business super scene hots up

TWO very different – and in one case groundbreaking – competitors have entered the corporate superannuation market this month.

The groundbreaker is REST, one of Australia’s largest ‘industry’ super funds. It has become the first industry fund to establish a standalone corporate master trust, known as Acumen.

“As a subsidiary of REST, Acumen will deliver the best features of a master trust but at a fraction of the cost,” CEO Neil Cochrane said.

Colonial First State, one of Australia’s most successful fund managers, will be among Acumen’s competitors.

Its FirstChoice master trust, launched in May for private investors, has now been extended to the corporate superannuation market.

Acumen and CFS are among 60 corporate master trusts competing in the Australian market, according to research group Rainmaker Information.

They target employers who want to outsource the hassle, paper work and legal obligations associated with providing superannuation.

The target market includes many companies that are shutting down their in-house super fund and outsourcing to a corporate master trust or other provider.

Mr Cochrane believes Acumen “will appeal to employers who want the flexibility and choices of a master trust but are still looking for value for money and a strong investment performance”.

“With over $4.2 billion in the fund and 1.2 million members, REST has the economies of scale and superior administration systems to provide a better corporate superannuation product at a cheaper price than most master trust providers,” he said.

The establishment of Acumen will, indirectly, allow REST to target managers who are not attracted to industry funds.

“People expect different levels of service and education as they move up to managerial positions,” Mr Cochrane said.

For instance, Acumen will report quarterly to members where-as REST reports annually.

FirstChoice Employer Super is targeted at mid to large size companies with 50 to 1,000 employees, according to Colonial First State head of corporate superannuation Jack McCartney.

It is an Internet-based service, with all contributions and administration conducted online.

As well as standard ongoing super contributions, FirstChoice will process lump sum contributions, rollovers from other super funds and spouse contributions.

It has also been designed to meet existing payroll systems.

A key attraction of master trusts like Acumen and First-Choice is the wide invest

ment choices available to members.

FirstChoice offers 35 investment options, provided by Colonial First State and more than a dozen other fund managers including Merrill Lynch, ABN Amro and Perpetual.

REST and Acumen both offer 12 investment options using 17 fund managers.