IN March of this year, BT Lifetime Super-Employer plan achieved an important milestone – it reached the $1 billion in funds under administration. The fund had been relaunched in 1998.
IN March of this year, BT Lifetime Super-Employer plan achieved an important milestone – it reached the $1 billion in funds under administration. The fund had been relaunched in 1998.
In the year 2000, the fund received record flows of $438 million. Dan McGee, head of Corporate Investment Services at BT Funds Management, identified a number of trends that had led to the growth.
The major factor that he identifies is the fact that financial advisers are recognising corporate superannuation will be a major growth area for their businesses going forward, and are actively partnering with BT in approaching small to medium-sized enterprises.
In the process of partnering BT Funds Management has undertaken with advisers, it has committed a huge amount of resources.
“We’ve also committed significant staff resources to these partnerships, growing from around 50 employees a year ago to 100 staff members today – including a dedicated business development team of 20 Australia-wide, Mr McGee said.
BT Funds Management in Australia has some heritage to point to, with parent company Principal Financial Group being the number one provider of 401K plans to the small-to-medium enterprise market in the US.
It has been able to leverage off that expertise to fine-tune its product for the relaunch in 1998.
The main aim of the product is to take away from the small to medium enterprise the administrative burden of having to provide the superannuation requirements for their employees. Superannuation is a very complex business and successive governments have tinkered at the edges of the system so much that it continues to get more complex.
Taxation legislation, APRA legislation and general consumer law are just some of the factors superannuation administrators need to be mindful of.
In this environment, small business, which generally has enough to attend to in terms of survival, does not need another burden.
When looking at the decision of whether to outsource, there are solid business and employee benefits to doing so.
Benefits to business
Every small business should assess whether it can afford to run its own superannuation fund.
The starting point in this assessment is to do a basic analysis of staff costs tied up in the management of the superannuation system.
Then there are software costs and, now increasingly, the cost of delivering information to the employees.
The reporting requirements for superannuation are far more complex than they were some years ago.
These are all costs to the administrator. By outsourcing the process, it is possible for the employer to save these as a minimum.
Benefits to employees
The old days of employees who simply ignored their superannuation arrangements and allowed the employer to be totally responsible and in charge of the investments of the fund are well and truly gone.
Even government funds are offering employees the opportunity to have a choice of underlying investments in their particular portfolios.
Once this type of choice is made available to all funds, the complexity will only increase.
Outsourcing will take this away from the employer and let the experts do what they do best.
The provision of this choice is a very valuable addition to an employee’s salary package and conditions of employment.
An additional benefit that flows from the outsourcing of superannuation provision is the fact that, in most cases, the service provider is usually allied to or will appoint an adviser to assist individual employees with their choices.
This allows the employees the opportunity to have their overall financial affairs examined and assessed.
BT Funds Management always has been lauded as a fund manager that has had its administration well and truly under control.
That control will be its key selling point in the corporate superannuation area.
The fact that it has achieved the $1 billion under administration is indicative of the market’s acceptance of this product.
Some of the other benefits that are available through the BT Funds Management Lifetime Superannua-tion plan are such things as insurance benefits, access to discounted rates on home loans and spouse superannuation accounts.
So as they say in the car advertisements … please consider.
