||The LGS MySuper investment options outperformed the performance objectives and produced competitive returns.
|Fees and costs
||Our total fees are in line with the APRA fee standards, although slightly higher than the industry median. This is consistent with the services our members want and our active investment management approach. We are continuously exploring ways to reduce fees and costs.
||LGS protects its members with industry leading insurance offerings that are tailored to members’ age and gender. In addition, we have significantly lower insurance premiums when compared to the industry standard to ensure your super balance is not unnecessarily eroded.
|Options, benefits and facilities
||We are known for our excellent personalised member service which is delivered through a comprehensive range of channels, including our Australian contact centre and client relationship managers & financial advisers (city and regionally based) to support members.
|Operating costs and scale
||Overall, LGS is delivering equitable operating cost outcomes for members based on our scale and services delivered.
Please see the supporting data and analysis for each factor below.
The majority of MySuper products, as defined by APRA risk ratings, offer a medium to high-risk rated, single-strategy investment solution. Our MySuper product adopts an age-based strategy, where the investment option you are in changes to a lower risk investment the older you get (see table below for risk rating of the investment options). This manages your exposure to potential losses and reduces the risk of you being required to delay your retirement and/ or work longer.
||(Benchmark) Investment objective
|LGS – High Growth
||3.5% net investment return per annum above CPI, measured over a rolling 10-year period.
|LGS – Balanced Growth
||3.0% net investment return per annum above CPI, measured over a rolling 10-year period.
|LGS – Balanced
||2.0% net investment return per annum above CPI, measured over a rolling 10-year period.
|LGS – Conservative
||1.5% net investment return per annum above CPI, measured over a rolling 10-year period.
Source: Australian Bureau of Statistics, SuperRatings Pty Ltd – Fund Crediting Rate Survey 30 June 2020. (SuperRatings returns are calculated net of investment fees, tax and implicit asset-based administration fees. Explicit fees such as fixed dollar administration fees, contribution fees and switching fees are excluded.)
Investment Performance versus Other Funds
Source: APRA Quarterly Statistics 30 June 2020 (High Growth, Balanced Growth and Balanced).
Due to limited number of comparable options, the MySuper Conservative option has utilised data provided by SuperRatings Pty Ltd – Fund Crediting Rate Survey 30 June 2020 – Capital Stable (20-40) Index. (SuperRatings returns are calculated net of investment fees, tax and implicit asset-based administration fees. Explicit fees such as fixed dollar administration fees, contribution fees and switching fees are excluded.)
Fees and costs
LGS is committed to providing value-for-money services to members. Our fees reflect the active investment management approach to building investment portfolios and the high levels of service and support we offer to all our members (see Options, benefits and facilities section below). We continue to review opportunities to reduce member fees evidenced by the 3.8% reduction in administration % fee in July 2020 (26bps to 25bps) and 10.7% over the last 3 years (28bps to 25bps). LGS’s fees for administration and investments are the same across MySuper, Choice and Pension product offerings.
Source: APRA Heatmap – December 2020
Data source: APRA statistics June 2020. The Active Super total fees are based on the investment costs incurred in the financial year ending 30 June 2020, which were disclosed in the PDS issued on 1 July 2020. Conservative median data is calculated inclusive of products with “low” and “low to median” risk labels.
LGS insurance cover is designed to ensure that our members are insured in a way that matches their requirements through the various stages of life. The table below outlines how the insurance cover has been designed at the different age brackets.
The trustee has also ensured that it provides the Death and TPD cover at a competitive cost to members and has assessed the costs based on the various age brackets. The Industry standard is to aim for premiums that are less than 1% of salary. LGS premiums are less than half the industry standard.
Indicative representation of the amount insured at different stages of life.
Source: LGS, estimated average salary per age bracket (gender based), vs premiums.
Options, benefits and facilities
LGS considers that the services and benefits we offer are in line with our members' needs and requirements and appropriate for their best interests. The services detailed below are available to all MySuper, Choice and Pension Fund Members.
|| • Internally owned and managed, well resourced team
• Phone, email, webchat
• Call answered in 23 seconds on average
|Client Services Team
|| • Services Employers and Members at their work place
• Member seminars
|Financial Adviser Team
|| • Well resourced team
• Intrafund and comprehensive advice services
|| • Mobile app (balances, transactions, changing investment and insurance details)
• Online application
• SuperMatch2 services
|Head and Regional Offices
|| • Sydney, Newcastle, Wollongong, Parramatta, Tamworth, Orange, Wagga Wagga, Ballina
Extensive Retirement Options
LGS has an account-based pension which allows you to receive a pension (to add to your age pension from the government) which also allows a transition to retirement for those who want to ease into retirement slowly.
We also offer Guaranteed Fixed Term Income and Guaranteed Lifetime Income products for those who want a guaranteed payment for later in life.
|Transition to Retirement (TTR)
|Guaranteed Fixed Term Income
|Guaranteed Lifetime Income
||Client Satisfaction Rating (@ 30 June 2020)
|| • Ease of doing business = 8.1/10
• Overall Satisfaction = 8.0/10
|Financial Adviser Team
|| • Ease of doing business = 8.8/10
• Overall Satisfaction = 8.8/10
|Member Workplace Visits
|| • Ease of doing business = 9/10
• Overall Satisfaction = 9/10
Operating costs and scale
LGS is classified as a medium sized fund with approximately 80,000 members and $12bn in FUM at 30 June 2020. We manage our operating costs prudently and in the best interest of our members as we are a profit to member fund. Fees collected are used to provide value for money services to our members. We have the right balance of size and scale to continue to provide you with the investment expertise and personalised services that our members have come to know and trust today and into the future, and we continue to look for ways to reduce operating costs to members.
Source: APRA Annual fund-level superannuation statistics June 2020