WHILE many companies have completely outsourced their superannuation to master trusts and industry funds, others have chosen to keep their funds in-house.
WHILE many companies have completely outsourced their superannuation to master trusts and industry funds, others have chosen to keep their funds in-house.
In these cases there is a range of service providers, including administrators, asset consultants and investment managers, who can assist the super fund trustees.
The administration market in Perth is dominated by national groups Mercer and NSP Buck (see article above right).
Local competitors include Rokeby WA, which administers three funds including Western Power’s super fund, and West Coast Group.
West Coast has just been appointed servicing adviser to Western Metals’ super fund and employee benefits program.
This will involve handling the $15 million of funds under advice and servicing 450 employees in remote locations around Australia.
Allan Rickerby, manager of corporate superannuation said West Coast had won work with 16 corporate groups over the past 10 months. Another recent addition to its client list was Kakulas Bros staff superannuation scheme.
West Coast’s services include going onsite to manage fund administration tasks.
Frank Oliver, chairman of Western Power’s super fund, said the selection of Rokeby as fund administrator was based, in a large part, on its small size.
“One of the things we always wanted to differentiate ourselves on was to provide a personalised service,” Mr Oliver said.
“People can ring the administrator and talk to a real person.
“Web sites and punching phone numbers are the main way of communicating at a lot of other funds.”
Rokeby’s services include group seminars, individual interviews and newsletters to help educate fund members about superannuation and investment.
The Western Power fund, with 2,000 members, was established in 1997 after the (then) State Government closed its Gold State defined benefits scheme to new members.
The alternative West State super scheme was considered to be substantially less attractive.
Mr Oliver said Western Power wanted a superannuation scheme that would help it attract and retain top quality staff.
It also decided that, if it retained responsibility for superannuation, it should ensure it also had control.
Therefore it chose to establish its own fund rather than outsource to a master trust.
The all-important trustee role is governed by a committee comp-rising management and staff representatives.
“We retain absolute control and responsibility,” Mr Oliver said.
The fund has engaged PricewaterhouseCoopers to provide investment consulting services and has appointed six professional fund managers to invest its $70 million of assets.
Mr Oliver said the trustees regularly reviewed the returns, fees and services of its fund compared with alternatives.
On the crucial issue of investment returns, Mr Oliver said: “We have been able to outperform our benchmarks and the median returns of other funds”.
On investment choice, the fund offers four basic options plus the ability for members to ‘mix and match’ to get their preferred outcome.
Mr Oliver believes this gives members “virtually unlimited choice” though it falls well short of the 30-plus options offered by many master funds.
He said the fund had also negotiated insurance cover with premiums that are “in the main much lower than other trusts”.
