Club Plus Super amongst the lowest-cost industry funds
Thu 19 Jul 2012 | By Wouter Klijn | The Investor Daily
Club Plus will have no problems in complying with Stronger Super requirements around efficiencies for members, its chief executive says.
The $1.5-billion industry superannuation fund would have no problems in proving its MySuper members were well off compared to members in other super funds, Club Plus chief executive Paul Cahill said.
"One of the key aspects of MySuper is around what you charge members," Cahill told Investor Weekly.
"If you look at any of the surveys, one of the things you see is that we are among the cheapest.
"From our perspective we are in a sweet spot and we have no other intention than to remain an independent fund."
At a total expense ratio of 79 basis points for Club Plus's personal division super option, the fund is among the lowest-cost industry funds.
Although the fund is relatively modest in size in terms of assets under management, it has 105,000 members.
Consulting firm Tria Investment Partners has pointed out the size of a fund's member base is an important metric in determining a fund's viability, because most revenues come from weekly membership fees.
Tria Investment Partners managing partner Andrew Baker earlier this month said research indicated 100,000 members was the threshold for funds to become cost effective in terms of administration costs and member services.
Club Plus competes for members with other industry funds, including the $10-billion Hostplus, to which it recently lost a sponsorship deal with Club Managers' Association Australia's training arm.
But Cahill said its competitiveness was illustrated by the services it offered members.
"There are a lot of arguments going around that you need $20 billion in assets to run a fund, but if that's the case, then how can a fund like us run at a low cost and provide all the services that we do?" he said.
He pointed to the fund's in-house financial planning services and its recent addition of term deposits for pension members.
"We released the pension term deposit earlier this year. We have an arrangement with Macquarie and our administrator, AAS, has done a terrific job to bring that to life," he said.
"To my knowledge we are the only industry super fund that offers weekly-priced term deposits to both accumulation members and pensioners over three, six, nine and 12 months."
This article is for informative purposes only and does not necessarily represent the view of Club Plus Super.
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