MTAA Super – Performance and Fund Review

An overview of the company

MTAA Super is an industry super fund that was established as the Motor Trades Association of Australia Superannuation Fund for those in the motor industry (and associated industries). Today, anyone can become a member of this fund, although some options are still restricted based on employer. It is one of the largest superannuation funds in the country and was once one of the best super funds in terms of performance.

Key Facts

Inception

MTAA Super was established in 1989.

Funds under management

MTAA Super has more than $6.6 billion under management.

Membership

There are over 272,000 members

Other important information

Escaped turmoil through the early months of the global financial crisis, but took a heavy hit to many of their investment options a few months later. MTAA Super has struggled since this time (even when other funds were improving), but a recent overhaul of the fund has showed positive signs for the future.
They offer a number of investment options including “Pre-Mixed” and “My Choice” investment options.
Like all industry super funds they offer low fees and do not pay commissions to financial advisers.
A good range of insurance options such as death cover, total and permanent disability cover and income protection.
A range of additional benefits for members.

MTAA Super Fund Investment Options

Conservative

This option is designed to provide stable returns for the short and medium term with safe assets that are less exposed to risk. The conservative option has an actual asset allocation of about 34% cash, fixed interest (17% Australian and 15% Overseas), equities (10% Australian and 8% International), 7.5% infrastructure, 4.5% property and small percentages of other assets. (this asset allocation is subject to change)

Balanced

The balanced option aims for strong investment returns with balanced risk. It is the default option for accounts opened with MTAA Super. Australian and International equities make up over 50% of the asset allocation. Infrastructure makes up 15% with cash, fixed interest and property all under 10%. (this is subject to change)

Growth

The growth option aims to provide high investment returns with a higher level of risk. This investment option is made up of 75% equities (Australian and International), 12% infrastructure, 7.5% property and small percentages of other assets. (subject to change)

Target Return

The Target Return option was made obsolete on the 1st of May 2011, although members with funds previously invested in this option can continue with it (but they cannot make new investments into this option).

My Choice Options

There are four “My Choice” options that allow investors to have more control over their super investments. These include Australian Shares, International Shares, Diversified Fixed Interest and Cash. These options can be further tailored and mixed to create a custom investment option.

MTAA Super Performance

MTAA Super Performance - 1,3 and 5 year averages
Investment Option 1 Year 3 Years 5 Years
Conservative Option 5.25% 4.34% 0.96%
Balanced Option 10.46% 4.49% -2.19%
Growth Option 10.0% 3.83% -2.43%
Target Return Option 1.60% -0.03% -5.12%
My Choice – Int Shares 25.08% 10.22% 0.76%
My Choice – Aus Shares 20.33% 8.13% 2.83%
My Choice – Diversified Fixed Interest 2.96% 6.07% 6.97%
My Choice – Cash 2.86% 2.86% 3.80%

Current at the conclusion of the Financial Year 2012-13

Note: past performance is not an indicator of future performance

Insurance

MTAA members are provided with default insurance cover, which includes Death Cover and Total Permanent Disability Cover. This cover adjusts with age (younger members have less death cover by default). Super members aged 16-21 have 1 unit of Death Cover and 5 Units of Total Permanent Disability Cover. From age 22-26 the death cover increases to 3 units and from 27-70 Death Cover increases to 6 units and Total Permanent Disability Cover increases to 6 units. Each unit of insurance costs 50 cents per week, which means that members from 16-21 years of age pay $3 a week, 22-26 is $4 per week and 27-70 is $6 per week. This can be deducted from your super balance. Of course, this coverage can be adjusted to suit your personal needs. You can also elect to purchase income protection insurance through the fund.

Additional Benefits

MTAA Super offers a number of additional benefits to members. One of the most popular benefits is free financial education and advice from qualified staff. You also have access to full financial planning, but there is a fee for this service. The fund has good customer service and the call centre is open from 8am to 7pm every weekday. You can also access your account via an online portal. MTAA is MySuper authorised and will be launching their product soon. Other benefits include basic investment information and handbooks, retirement calculators and planning, information seminars and similar features.

Fees and Charges

The management cost of this fund is approximately $83 per year with an additional 0.15% of the account balance (max of $533). The investment fees range from 0.11% to 1.03%. There are other fees and charges for special services.

MTAA Super Rating and Reviews

There is no doubt that MTAA Super has struggled in recent years, but a recent shake up of this super fund should be enough to get it back on track. The best approach in the current market is to keep an eye on this super fund for signs of recovery. It could very well become one of the best performing super funds in the industry. Of course, you should always compare super funds to find one that best meets your needs.

Summary
Reviewer
Kay Bowden
Review Date
Reviewed Item
MTAA Super
Author Rating
3