Defined Benefit Funds - A New Competitive Initiative

The Superannuation Trust of Australia (STA) in conjunction with its fund administrator, Superpartners, today announced it now has the capacity to accommodate defined benefit superannuation plans. This is an important initiative for Superpartners and their Industry Fund clients as over 80% of the remaining private sector corporate funds have a defined benefit component. Assets in these funds total about $60b.

STA Chief Executive, Paul Costello, said "STA has been keen for some time to be able to accommodate defined benefit plans and we have been working closely with Superpartners over the past few months to achieve this competency. With the pace of employers considering the outsourcing of their superannuation arrangements continuing to increase we have been strongly of the view that it was essential that STA has the ability to provide superannuation services to those employers who wished to continue with their defined benefit plans. We are therefore delighted to be able to make today's announcement".

Superpartners Chief Executive Officer, Mr Frank Gullone said "The capacity for Superpartners to administer defined benefit plans is an exciting initiative for us and our clients. It means that our Industry Fund clients can now offer an even more attractive proposition to their employer clients. Although STA has been a key partner in the development of this new service we anticipate that a number of our other Industry Fund clients will also wish to offer this service to their own clients. In addition, it places Superpartners in a much stronger position to attract new Industry Fund, Multi-Employer and Public Sector clients in the future".

STA have engaged the newly launched superannuation consultancy, The Heron Partnership as Actuary and Consultant to their fund. STA'S Paul Costello said "We chose the Heron Partnership as we believe it is important to have a totally independent firm providing advice to our employer clients".

The Heron Partnership's Executive Director and Senior Actuary, John Smith said "We are very excited to be working with STA in introducing this initiative. STA in conjunction with Superpartners will be offering a very competitive service, not just on price but also in respect to the total service they will be able to provide."

Mr Chris Butler, The Heron Partnership's Managing Director said, "As Actuary and Consultant we will be providing STA's clients with ongoing strategic and technical advisory services and also act as Client Manager for those clients with defined benefit components to their funds. When combined with the scale and capability of Superpartners, the fully integrated service will set this offering apart from others in the industry".

Paul Costello went on to say "From our perspective this relationship puts STA in a strong position to be considered as an alternative to employers wishing to outsource their superannuation arrangements."

Superannuation Trust of Australia (STA) is a not-for-profit superannuation fund covering employees in a wide range of industries. Membership is over 400,000 and total assets under management at 30 June 2002 were $3.4 billion. STA seeks to offer value to members through passing on the benefits of scale through lower costs. Members pay $1.00 per week in administration charges and investment management fees are around 0.40% for its balanced option.

Superpartners is a leading national Industry Fund administration and consulting company. It has 18 client funds, including a Redundancy Trust and a Sick Leave Trust. The company maintains accounts over 3.5 million fund members and accepts contributions from almost 124,500 employers, which are allocated to individual member's accounts. Superpartners maintain a range of specialist skills inhouse, enabling the company to offer clients strong and diverse support in the administration of their Fund.

The Heron Partnership is an independent consultancy to Australia's superannuation industry. It was launched in July 2002 and challenges existing consultancy practices through providing an alternative of independent advice, low fees and greater accountability for implementation and outcomes. The Heron Partnership is based in Melbourne and Sydney.