UniSuper is considering a new type of accumulation fund that sits in between defined contribution and defined benefit.
Any such fund would be offered as a choice to members, at its own cost, alongside its current accumulation fund.
The option is to be discussed at a strategy meeting in February, based on a proposal based in part on learnings from existing systems of collective DC or limited guarantee DB.
The research would be carried out under the principle of always acting in members best interests, said Kevin O’Sullivan, chief executive of UniSuper, who took over from Terry McCredden in July.
“The plan is to look at other systems in countries such as the Netherlands, Denmark and Canada to see what could be applied to a more generous system or one with more guarantees.”
O’Sullivan is an actuary by training, and as such, product development is an area he is confident of delivering on at UniSuper.
“There can be improvements to the way that we deliver superannuation to members in Australia,” he said. “Once we get all this legislative stuff out of the way, we and other funds out there are saying is there a better way to do it.”
Any development would leverage the skill of its experienced board which includes many former financial services executives such as Chris Cuffe and Ian Martin.
“For us, just being the best superannuation scheme for university employees in Australia is not what we want to be. We want to be the best super fund for the size that we are, considering all the various things that are happening around the world,” he said. “To not think about alternatives would be sub-optimal.”
When asked if the launch of the new fund would mean a continuing need for a defined benefit fund, he said Unisuper would ensure it continued to meet the needs of the higher education sector.
Another topic up for debate at UniSuper’s February strategy meeting will be whether the fund launches a direct investment option for members.