2020 Changes to the ESSSuper Investment Options, and insurance

May 09 2021

From 1 April 2020 the following changes were made to the insurance and investment options available to ESSSuper members who have an Accumulation Plan, Beneficiary Account, Working Income Stream and/or Retirement Income Stream.

Change Impact of the change
Changes to Insurance

In September 2019, the Federal Government passed the Putting Members' Interests First Bill to protect low balance accounts and the superannuation savings of members aged under-25 from their account balance being eroded by insurance premiums. These reforms, which will take effect on 1 April 2020, require superannuation trustees to only provide insurance on an "opt-in" basis to:

  • members who are under-25 and begin to hold a superannuation account from 1 April 2020; and
  • members whose superannuation balance has not been $6,000 or more on or after 1 November 2019.


Should members wish wish to maintain their default insurance cover, please complete the online form available
here.

Following a review of our insurance premiums and as a result of the insurance legislation changes, our insurance premiums will increase for the first time in over 12 years.

Effective from 1 April 2020, the cost of Death only, Death and Total Permanent Disability Insurance will increase by 5%. The cost of Income Protection Insurance will remain unchanged.

Adjustments to the investment objectives of two investment options, and adjustments to the strategic asset allocations of five investment options 

Changes have been made to the strategic asset allocations and the investment objectives. The changes aim to improve the long-term investment performance with a continued focus on providing members with a smooth path of returns over time. The changes to the investment options are detailed below:

Investment Objective Changes: Accumulation Plan, Beneficiary Accounts and Working Income Stream

The return objective for the High Growth and Shares Only investment options were changed as follows:

Investment Option Return Objective to 31 March 2020 after fees and taxes  Return Objective from 1 April 2020 after fees and taxes 
High Growth CPI plus 4.5% p.a. CPI plus 4.25% p.a.
Shares Only CPI plus 4.5% p.a. CPI plus 4.0% p.a.


Investment Objective Changes: Retirement Income Stream 

The return objective for the High Growth and Shares Only investment options were changed as follows:

Investment Option Return Objective to 31 March 2020 after fees and taxes Return Objective from 1 April 2020 after fees and taxes
High Growth CPI plus 5.0% p.a.  CPI plus 4.75% p.a.  
Shares Only CPI plus 5.0% p.a.
CPI plus 4.5% p.a.

Strategic Asset Allocation and Range Change for the High Growth investment option

The strategic asset allocation and ranges for the High Growth investment option changed as follows:

   To 31 March 2020
From 1 April 2020

 Strategic % Allowable Range % 
Strategic % Allowable Range %
Australian Shares  26% 10-40% Australian Shares 28% 10-40%
International Shares   39.5% 20-50% International Shares 41.5%  20-55%
Private Equity  0% 0-10% Private Equity  0% 0-10%
Property  8% 0-20%  Property 9%  0-30% 
Infrastructure  10% 0-20% Infrastructure  12.5% 0-30% 
Alternative Strategies  7.5% 0-15% Alternative Strategies
5% 0-15% 
Multi Asset Strategies  9% 0-20% Multi Asset Strategies
0% 0-20% 
Credit  0%  0-15% Credit 4%   0-15%
Sovereign Bonds  0% n/a Sovereign Bonds 0% n/a
Cash  0% n/a Cash 0% n/a

Strategic Asset Allocation and Range Changes – Basic Growth, Conservative, Growth, Balanced and Defensive Investment Option 

The ESSSuper Board has changed the strategic asset allocation ranges of a further 5 investment options from 1 April 2020. Please note: Strategic Asset Allocation ranges of Shares Only and Cash investment options have not changed. Details of the strategic asset allocation changes applicable before and after 1 April 2020 are provided in the following tables for the Basic Growth, Conservative, Growth, Balanced and Defensive investment options: 
Basic Growth  To 31 March 2020
From 1 April 2020

 Strategic % Allowable Range % 
Strategic % Allowable Range %
Australian Shares  24.5% 5-35% Australian Shares 25% 5-35%
International Shares   36% 10-45% International Shares 36.5%  10-50%
Private Equity  0% n/a Private Equity  0% n/a
Property  8% 5-15%  Property 8%  5-15% 
Infrastructure  8% 0-15% Infrastructure  10% 0-15% 
Alternative Strategies  0% 0-10% Alternative Strategies
0% 0-10% 
Multi Asset Strategies  10% 0-30% Multi Asset Strategies
2% 0-30% 
Credit  4%  0-15% Credit 7.5%   0-25%
Sovereign Bonds  7.5% 0-20% Sovereign Bonds 8.5% 0-20%
Cash 2% 0-15% Cash 2.5% 0-15%
Conservative       

 Strategic % Allowable Range % 
Strategic % Allowable Range %
Australian Shares  6% 0-15% Australian Shares 6% 0-15%
International Shares  9% 0-15% International Shares 9%  0-15%
Private Equity 0% 0-5% Private Equity 0% 0-5%
Property 7.5% 2.5-12.5%  Property 7%  2.5-12.5%  
Infrastructure  5% 0-10% Infrastructure  6.5% 0-15% 
Alternative Strategies  3% 0-6% Alternative Strategies
2% 0-6% 
Multi Asset Strategies  5.5% 0-15% Multi Asset Strategies
11% 0-30% 
Credit  9%  0-15% Credit 9%   0-15%
Sovereign Bonds 11.5% 0-30% Sovereign Bonds 12.5% 0-30%
Cash 43.5% 30-60% Cash 37% 30-60%
Growth  To 31 March 2020
From 1 April 2020

 Strategic % Allowable Range % 
Strategic % Allowable Range %
Australian Shares  16% 5-30% Australian Shares 19% 5-30%
International Shares   23.5% 10-40% International Shares 24%  10-40%
Private Equity  0% 0-10% Private Equity  0% 0-10%
Property  10% 5-15%  Property 10%  5-15%
Infrastructure  8.5% 0-15% Infrastructure  10% 0-15%
Alternative Strategies  8% 0-15% Alternative Strategies
6.5% 0-15% 
Multi Asset Strategies  12.5% 0-25% Multi Asset Strategies
4% 0-25% 
Credit  10%  0-20% Credit 13.5%   0-30%
Sovereign Bonds 7.5% 0-20% Sovereign Bonds 8.5% 0-20%
Cash  4% 0-15% Cash 4.5% 0-15%
Balanced  To 31 March 2020
From 1 April 2020

 Strategic % Allowable Range % 
Strategic % Allowable Range %
Australian Shares  11% 5-25% Australian Shares 14% 5-25%
International Shares   16% 5-30% International Shares 16.5%  5-30%
Private Equity  0% 0-10% Private Equity  0% 0-10%
Property  10% 5-15%  Property 9%  5-15% 
Infrastructure  5.5% 0-10% Infrastructure  9% 0-15% 
Alternative Strategies  7.5% 0-15% Alternative Strategies
5.5% 0-15% 
Multi Asset Strategies  12.5% 0-25% Multi Asset Strategies
7% 0-25% 
Credit  10%  0-20% Credit 13%   0-30%
Sovereign Bonds 15% 5-40% Sovereign Bonds 16% 5-40%
Cash  12.5% 0-25% Cash 10% 0-25%
Defensive  To 31 March 2020
From 1 April 2020

 Strategic % Allowable Range % 
Strategic % Allowable Range %
Australian Shares  3% 0-10% Australian Shares 3% 0-10%
International Shares  4% 0-10% International Shares 4%  0-10%
Private Equity  0% n/a Private Equity 0% n/a
Property  3% 0-10%  Property 3%  0-10% 
Infrastructure  3% 0-10% Infrastructure  4% 0-10% 
Alternative Strategies  0% n/a Alternative Strategies
0% n/a 
Multi Asset Strategies  2% 0-10% Multi Asset Strategies
7% 0-25% 
Credit  5% 0-10% Credit 5%  0-10%
Sovereign Bonds  10% 0-40% Sovereign Bonds 13% 0-40%
Cash  70% 50-90% Cash 61% 50-90%