The super fund award is aimed at funds that cater for the typical member, that is, someone with an account balance of up to $50,000. The focus is on MySuper products, because that is where the great majority on members’ money will be invested.

The pension phase of superannuation is very different. Our pension fund award is aimed at the typical retiree member, that is, someone with an account balance of around $200,000. They have different priorities and place different demands on their funds compared with accumulation members, and our methodology reflects that.

Many Australians working for medium-sized and larger employers have their super with a corporate plan. There are about 20 funds, mainly master trusts that cater for this sector.

It’s a large segment of the industry, with assets of about $130 billion and about 4 million members, and the economies of scale enable providers to deliver excellent value.

Retail master trusts mostly target people who are more engaged with their super, so-called ‘choice members’. They have different needs to the majority of default fund members. They generally have advisers and seek greater choice of investments and more ‘bells and whistles’ in the services the fund provides.

These funds have invested heavily in dedicated systems that help advisers manage their client base and access their client details. While they represent only a small part of the industry, at least in terms of numbers of members, it is still an important sector and we want to recognise this.

Investments are the most important aspect of superannuation. What we are most interested in are a fund’s investment processes and resources and whether they are likely to deliver strong returns going forward.

This year, a lot of funds have targeted investments as an area where they can reduce costs by increasing the level of passive management. We think that’s likely to be a false economy, and our views will be reflected in the awards.

People and process continue to be key issues when assessing investments. We look closely at investment governance, including the investment experience of the Investment Committee and the internal investment team, and who is actually responsible for making decisions.

Recognising innovation within the industry is a key theme of the awards and is particularly appropriate in a year when MySuper has become fully operational.

This year the award will focus on lifecycle products. While there is still much debate about the suitability of different designs, they are certainly an innovation for the industry and a step in the right direction.

We have the ‘cohort’ approach where your exposure to more risky assets reduces progressively as you get older, and we have the ‘switching’ approach where your entire account balance is transferred to a less risky asset allocation at a certain age. We also have passively and actively managed lifecycle products. All of these approaches will be considered.

Member services are the second most important aspect of superannuation.

This year we have placed particular emphasis on a fund’s retirement calculator because this is the starting point for helping members understand their retirement goals and whether or not they are on track to achieve them. We also consider the member statement. Does it identify whether the member has a retirement income gap and, if so, are there effective calls to action to encourage them to do something about it?

Investing in retirement, as opposed to investing for retirement, is one of the hottest topics in the superannuation industry. We are keen to encourage funds to develop new and innovative products for retirees.

Currently, there are only a handful of products that cater for the needs of this group. There needs to be more innovation and more lobbying of government to help make capital protected products and other longevity-aware products more viable.

In response to MySuper, many retail funds have made significant changes to their default investment options. This year the integrity award seeks to identify those funds that have ‘done the right thing’ in terms of sticking to their true investment beliefs. By this we mean investing in the best possible way they can for members, rather than compromising their approach to meet a perceived competitive price point.

The integrity award is to recognise them in a public way and encourage other funds to reach similar high standards.

This is only a small group to give recognition to, but in terms of member outcomes, it’s by far the most influential group within the industry. So again it’s time to recognise publicly those asset consultants that provide outstanding service.

Our assessment concentrates on the consultant’s investment beliefs and the quality of its consulting team, client base, capital markets research, manager research and strategic tilting record.