26 March 2020
Dear AustralianSuper Member
The unprecedented global response to COVID-19 has been truly astonishing and like you, I’m thinking about how the future will look. I’m also thinking about what this will mean for you, your family, millions of other Australians, and indeed people everywhere.
At a time when day to day life is changing so rapidly, I’m writing to you about something of an enduring nature – your super.
In this climate of disruption and uncertainty, it’s important to remember that super is a long-term investment, and that Australia’s superannuation system is sound, resilient and highly regulated.
COVID-19 AustralianSuper’s response
I want to reassure you that the team at AustralianSuper is focussing on taking considered and appropriate steps to successfully navigate the COVID-19 situation and associated disruption.
To protect our people and the community, AustralianSuper is generally now operating as a remote workforce. As a strong supporter of workplace flexibility, AustralianSuper was already enabled to support some remote working arrangements. This meant we were well prepared to quickly extend the move across the organisation to a remote working model.
The disciplined investment processes adopted across our investment teams, which include more than 150 investment professionals, have not changed. These specialist teams continue to source and analyse relevant information, and work together to actively make investment decisions to seek to minimise the impact of current volatility, and position the portfolio for the long-term.
We’re focussed on you and your super
What we’re experiencing is new territory for everyone, so strong judgement, market knowledge, and responsible planning are crucial to managing this situation.
AustralianSuper has established a team of our organisation’s leaders which meets daily to review and respond to the COVID-19 situation. You can take comfort in knowing these people are highly experienced specialists and they’re focussed on you and your super.
The present climate is one of uncertainty, but you can be assured that we’re acting in your best interests and will keep you informed.
You can find key information and updates on the AustralianSuper website.
What you need to know
In the last ten years the Balanced investment option – where most members have their super invested – has produced a full decade of positive returns, averaging more than 9% per annum1. The onset of COVID-19 has led to global investment markets deteriorating rapidly, and this has impacted the Balanced Option (as well as other options), meaning it is returning negative 7.4%2 on a financial year to date basis.
While any fall in performance may be concerning, this figure is relatively modest in the context of current share market turmoil and the Fund’s investment performance over the last 10 years. This speaks to the strengths of the well diversified portfolio that Chief Investment Officer Mark Delaney and his team have constructed.
For members who are in the Balanced investment option, exposure to unlisted assets is playing an important role to reduce the impact of market volatility on returns. While all unlisted assets have been revalued downwards to ensure they reflect fair market value in the current investment environment, the impact on returns has been much smaller than that of listed equities.
Market fluctuations are normal parts of investing
Investment performance in all of the Fund’s investment options will change in the weeks and months ahead, but looking back over history this shouldn’t necessarily be a cause for alarm. We know that bear markets and recessions are not uncommon, and indeed should be expected over a lifetime of investing.
During this time of uncertainty, it’s important to remember that markets eventually recover, and that by staying invested, members will be well positioned to benefit from the rebound.
Hidden impacts of switching
History suggests that many members who stay invested through market ups and downs end up better off than those who switch investment options. One of the main reasons that members change investment options is in response to market volatility. We saw this happen during the global financial crisis. Experience tells us that this is ill-advised, as they won’t be in a position to benefit when markets rebound, and that those who stay the course are more likely to end up in a better position.
Changes to superannuation rules
Recently, the Federal Government has made changes to some superannuation rules. When further details are announced, we will make them available on our website.
The first change will allow some members who have been significantly financially affected by COVID-19, to access a limited amount of their retirement savings. Details of this change remain to be finalised.
The second change affects the drawdown rate by retirees and the third is a change to deeming rates for pensioners. Deeming rates are the amount the government calculates income from your financial assets to be.
Putting members first
COVID-19 will have implications for how we invest your super savings, how we service you, and how the Fund operates. We are planning for months of disruption rather than weeks.
Our organisation, people, systems and processes continue to be focussed on our sole purpose – delivering members their best possible retirement outcomes.
The present demand on our contact centre and website is unprecedented. We have increased the size of our member services teams to respond to the record numbers of requests for information, but you may still experience significant delays when contacting us.
To improve your experience and avoid long hold times, we suggest that you find information or contact us through our website if you can.
If your enquiry is not urgent, we also ask you, in these extraordinary circumstances, to postpone your contact with us until our capacity to respond increases.
Please know that you are front of mind here at AustralianSuper, and we remain focussed on working for you amidst these challenges.
Future updates and further information will be provided via the AustralianSuper website.
1. For the 10 years to 29 February 2020.
2. As at end of day 25 March 2020
Investment returns are not guaranteed. Past performance is not a reliable indicator of future returns.
This information may be general financial advice which doesn’t take into account your personal objectives, situation or needs.
Before making a decision about AustralianSuper, you should think about your financial requirements and refer to the relevant Product Disclosure Statement. AustralianSuper Pty Ltd ABN 94 006 457 987, AFSL 233788, Trustee of AustralianSuper ABN 65 714 394 898.