In this section you’ll understand the measures we put in place to achieve investment performance and to help you have the retirement you deserve.
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INVESTMENT RETURNS AND MEASURES OF SUCCESS
A comfortable retirement income
We put our focus on the income that your superannuation investment may be able to generate for you when you retire. We measure ourselves on your funding ratio, that is the level of income your superannuation savings can generate for you in retirement compared with a common industry-wide benchmark—the ASFA comfortable standard.
For example, our modelling using December 2020 (PSSap and ADF Super) customer data shows that by age 65, the weighted average funding ratio for all contributing PSSap and ADF Super customers are on track to be about 126% funded compared to ASFA comfortable standard
Please note: these results are based on our current best estimates of expected future returns and is used for illustrative purposes only.
Note:The main assumptions involved in the simulated results are: the customer will maintain their existing contributions with CSC until retirement at age 65; the investment return objective is achieved each year until retirement; constant price inflation and stable wage inflation until retirement; no change in taxation on contributions and earnings. The customer's account balance and contributions are accumulated with the net of tax investment earnings to derive the projected account balance at retirement. A living standard adjustment is added to price inflation in determining the present value of the projected account balance. The present value of the account balance is then compared against the ASFA retirement standard.
Net return rate
We always track our performance versus the objectives we set for ourselves. For example, as at 30 June 2020, 10 year annualised net return for the PSSap MySuper Balanced investment option was 7.3%, moderately above the average return target of 5.3%.
Note: Target return for PSSap MySuper Balanced option is CPI + 3.5%.
Value for money and resilience to market conditions
Our goal is to generate high and very competitive net real returns for the least amount of risk required—to grow our customers’ wealth and generate sustainable income for you in retirement.
Funds with the lowest Investment Cost Ratios do not necessarily offer the best value*.
What matters to us is that the cost of managing your super is more than compensated with robust, strong net returns; and that your wealth is less vulnerable to market conditions up to the time you retire, and that you are getting value for money—i.e. the costs incurred deliver benefits through more robust and sustainable wealth accumulation.
The following graph shows that over the last 10 years, CSC has avoided significantly more downside risk than the median superannuation fund in the SuperRatings 50 peer universe, while our ICR is near median levels.
Our historical investment performance has been very competitive, and delivered greater certainty of sufficient retirement income (i.e. with less volatility or risk) than the average fund.
*It may be helpful to think about it as ‘Overall value-for money and efficiency’.For example, take your car, the overall value for money is often seen in terms of how many kilometres you can drive on one litre of fuel. But to fully understand the costs and benefits you would also need to consider things like the cost of purchase, running costs, petrol costs, safety, fuel efficiency, the types of journeys you’ll drive—such as off-road, or city stop start driving, etc.
Note: ICRs is the ratio of the total indirect costs to the total average net assets. Indirect costs include such fees paid to investment managers, custodian costs, investment consulting costs and internal investment costs, and are deducted from the value of the income or assets of each investment option. ICRs are required, by law, to be disclosed in Product Disclosure Statements (PDSs).