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Russell launches unique new solution to manage employers' choice of superannuation fund dilemma
SYDNEY, 16 February, 2005 – Australian employers are struggling to come to grips with the
new administrative and compliance issues around the Government’s proposed choice of super fund
legislation, prompting many more employers to consider getting out of superannuation all together.
In response to feedback from a number of large Australian employers, global investment and
superannuation specialist Russell Investment Group today launched a reworked superannuation
outsourcing solution, which will allow employers to completely exit the superannuation arena under the
new choice regime. Developed in close consultation with employers, the new ‘Russell SuperSolution’ 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.
Russell SuperSolution is the ‘next generation’ of the successful SuperSolution outsourcing
service developed jointly by Towers Perrin and Russell to help large companies administer their
superannuation funds. Following widespread concern from employers over the ever-changing choice of
fund arrangements, the new solution combines interaction with employees; a clearing house to facilitate
transfer of super contributions to employees’ chosen funds; compliance checks on chosen funds; and a
state of the art default fund for members who don’t opt to ‘choose’ (the Russell MasterTrust).
Mr Alan Schoenheimer, Managing Director of Russell in Australasia, said many companies had
yet to come to terms with the administrative and compliance complexities of the proposed choice regime.
“An employer’s superannuation problems change radically from 1 July 2005. The problem has
now got bigger. Rather than making a decision about whether to outsource the corporate superannuation
fund, employers now have to decide how to deal with choice, and the additional burdens this will place on
their employee support systems,” Mr Schoenheimer said. “Under choice, whether or not to outsource the
corporate super fund – which will essentially become the default fund – is only one part of the problem.”
Mr Schoenheimer said the industry was placing too much emphasis on the default fund and
clearing house facilities.
“In the new world of choice, looking at which master trust should be the default fund is only part
of the answer; a clearing house facility to allow distribution of contributions to multiple funds is the easy
bit. The hard bit, especially for large employers, is to communicate with employees in relation to their
options and to manage the choice process. Some of our clients have asked us for a broader solution, and
we believe Russell SuperSolution offers the most comprehensive and practical outsourcing option
available in Australia.”
Russell SuperSolution comprises two core elements – the Russell MasterTrust, which serves as a
market-leading default fund for employees’ super contributions; and the Russell ChoiceSolution – a
comprehensive set of support services which allows employers to outsource:
- The necessary interactions with all employees (not just those in Russell funds) in relation to their fund selection (including confirming complying status)
- The dispersion of contributions to appropriate funds
- Resolution of employee inquiries in relation to their super contributions
As part of the Russell 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.
Mr Schoenheimer said the new service built on Russell’s extensive experience in managing the
investment and administration of some of Australia’s largest and most sophisticated superannuation
funds. Last month Russell confirmed it had secured the largest corporate super outsourcing deal in
Australia following News Limited’s decision to outsource the entire management its complex $700m
NewsSuper fund to the Russell MasterTrust.
“We believe choice will present some major challenges to Australian companies, and may result
in many employees opting for a worse super fund than they already have. Russell’s new solution gives
employers two crucial things: confidence that their employees have a rock solid default fund in the
Russell MasterTrust; and an established, experienced partner to support them through the looming
administrative complexities raised by the choice environment.”
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