In search of the green nest egg.

1 October 2013 — Australian Ethical has gained approval for a MySuper option.

MySuper, a superannuation reform brought about by Labor under Julia Gillard, means that from 1 January 2014, employers must pay default super contributions to an authorised MySuper product. The Government intends for MySuper to be a simplified, low cost product for members that do not make an active choice in their superannuation.

MySuper has a set of regulated features including:

  • a single investment option
  • a minimum level of insurance cover
  • an easily comparable fee structure, with a short prescribed list of allowable fee types
  • restrictions on how advice is provided and paid for
  • rules governing fund governance and transparency

MySuper products were able to be launched from July this year.

Australian Ethical says its MySuper option will be highly differentiated from others on the market due to active management, high conviction ethics and high value insurance.

The company makes investments in profitable areas making positive contributions, such as energy demand reduction, innovative technology and medical breakthroughs. It has an investment ban on companies exposed to industries dealing in things like coal, oil, tobacco, gambling and child labour.

Because employees rarely deviate from employer’s funds, most Australians will be in a MySuper account from 2014.

Australian Ethical are targeting employers wanting to attract ethically minded employees to their company.

“We see the members of our MySuper option including employees in socially or environmentally responsible companies, institutions and not-for-profit organisations,” said Australian Ethical managing director Phil Vernon. “We are targeting employers who wish to attract values-based employees.

“Offering an ethical superannuation option to their employees is an opportunity for responsible employers to provide competitive retirement savings options, knowing that they are making a positive impact on society and the planet we live on.”

Australian Ethical general manager, strategy and communications Paul Smith recently told The Fifth Estate that ethical investors were the “smartest people in the room”, because of the complexity of ethical investment.

Being ethical didn’t affect the bottom line, though, he said, with ethical funds attracting some of the highest returns.

See our article Ethical investment: complex, sometimes tough, but a nice little earner