Australian companies rush to outsource super
Russell announces inflows of $400m to SuperSolution Mastertrust, plus strong takeup of its new ChoiceSolution package
SYDNEY, 7 June, 2005 – Global investment and superannuation specialist, Russell Investment
Group, today announced that two leading Australian companies – George Weston Foods and GE
Corporation – will outsource the management of their corporate superannuation funds to the Russell
SuperSolution Mastertrust, boosting the Mastertrust by $400 million and taking total funds under
management to $2 billion.
Russell also confirmed that more than 10 major Australian companies have signed up to its
comprehensive new superannuation choice package – Russell ChoiceSolution – which allows employers
to completely outsource all elements of administering superannuation for employees under the new
choice regime. Employers taking up the ChoiceSolution package include companies of various sizes such
as News Limited, Johnson & Johnson and BHP Billiton, in addition to George Weston Foods and GE
Corporation. In total, the companies employ approximately 100,000 people who are eligible to choose
their superfund from July 1.
Mr. Stephen Roberts, managing director, institutional investment services for Russell in
Australia, said employers were actively negotiating the best value super package for members – in terms
of achieving a sophisticated default fund, competitive insurance, and comprehensive member services.
“Despite all the talk about ‘expensive’ retail trusts, the fact is that a large percentage of
employees will find themselves in good quality, competitively priced super funds, which are operating at
wholesale rates as negotiated by their employers,” Mr. Roberts said. “By utilizing our scale and global
expertise, Russell has taken the high-end services previously available only to the largest funds, and made
it work cost-effectively for small to medium-sized employers. This means employees can enjoy a very
high quality super package without having to pay retail fees,” he said.
Mr Roberts said choice had in many ways distracted members from the underlying investment
issues which would ensure the best result in the long term.
“Our core message to employees is to focus on three key areas: make sure you have your asset
allocation right; make sure you have the right amount of insurance cover; and make sure you are saving
enough for retirement – these are the decisions that will make a difference in the end,” he said.
As the world’s largest multi-manager, Russell provides multi-manager solutions for a broad range
of institutional investors and corporate superannuation funds, as well as a growing number of retail
investors through alliances with leading financial planning groups. Russell’s multi-manager funds are
underpinned by the group’s leading global manager research team, which conducts more than 5,000
manager interviews each year – giving Russell investors the pick of the best investment talent from
around the world.
The Russell SuperSolution Mastertrust was recently awarded the top ‘5 Apples’ rating in the
medium and large superannuation funds category by independent consultant Chant West Financial
Services. Russell was also recently named the ‘preferred’ multi-manager provider in Australia by
independent research house Lonsec.
Mr. Roberts said employers were attracted by the concept of a complete outsourcing solution. A
key differentiating factor of Russell ChoiceSolution is that it goes beyond the basic ‘clearing house’ funds
transfer facility offered by most providers, and places the onus on Russell to interact with employees as
they establish their new superannuation arrangements – alleviating the growing burden on companies’ HR
and payroll teams. This means Russell will manage all employee liaison, communication and education,
as well as offering a state of the art default fund for members who don’t opt to ‘choose’ (the Russell
SuperSolution Mastertrust).
As part of ChoiceSolution, Russell will maintain a database of superannuation arrangements for
each employee, as well as an employee website providing information on the company’s super offering
and facilitating the choice process. All employee inquiries will be handled by a dedicated Russell call
centre, which will have access to employee details and the super options available.
Implementation of the ChoiceSolution package is already underway for new clients, with
complete superannuation arrangements due to be in place well in time for the 1 July choice deadline.
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