The concept of superannuation is predicated on one fundamental narrative: your employer(s) will put aside a portion of your salary to be invested in a way that one day you will have an income when you reach the minimum age for retirement.
But what if that model doesn’t suit your life and your wealth accumulation goals?
Zuper Super has raised the question in a new paper entitled Pension Tech: Welcome to The Unretirement Era.
In it, Jess Ellerm, Zuper Super co-founder and CEO explains what this means:
“Our insights over 2 years ago led to the creation of Zuper,” Jess says. During that time the Trump administration has challenged the foundations of democracy, Brexit has shaken the global economy and the #MeToo movement has fractured the ceiling of the world’s established power structures. This social upheaval is trickling through into the financial sphere, and pensions cannot remain static in the face of change. It is time to acknowledge the old ways of creating wealth simply no longer work relative to how millennials and Generation Z are choosing to live, and pensions are part of this. It is time we unpacked the traditional concept of retirement, and created a new pension architecture that creates financial freedom in the here and now. It is also time to create a new language around money – one that stops alienating the majority, and democratizes and demystifies a fundamental human right.”
The superannuation industry is at a “tipping point,” Jess says.
“There is a different, emerging lifestyle and that has an impact on how we save for our future, and what the concept of retirement really is,” she says. “You have to move from it being a product to it being an experience, and a lot of new businesses are thinking about this. It’s not just a discrete product, but haw the different facets interlink to deliver a new experience, that’s where we start delivering. The idea that you’re going to need to reskill and retrain all through your life. This addresses the fundamental issues in creating wealth, around education, what is your money doing, is it building the world that you’re actually wanting to live in.”
Zuper Super offers members two “bases”, which constitute at least 80% of member’s investments – Zuper Impact, which screens out tobacco and nuclear weapons, and Zuper Impact Plus, which also screens out gambling, pornography, alcohol and fossil fuels. On top of that “base”, members can allocate towards three three themed portfolio choices – Zuper Green, Zuper Health, and Zuper Tech – which allows members to invest in the theme that aligns with their values. Members can allocate up to 20% of their contributions to one or all of the themes. The fund’s investments are based on a combination of index and ETF strategies.
Zuper’s trustee is Diversa, and many of their ETF and index funds are managed by BlackRock, Jess says. Zuper charges administration and management fees of 0.99% of account balances per year, plus insurance offerings through Hannover Re.
As part of the mission, Zuper Super has launched Wealthness, a content hub aimed at engaging with its membership base on themes of financial wellbeing. Wealthness is designed focus on life factors that impact on people’s ability to make money and build financial freedom, including saving for retirement as well as other financial goals.
“Wealthness pulls together this idea that wealth is dependent on a myriad of different things in your life,” Jess says. “Health, relationships, mindfulness – not just spend less, save more, but optimise the conditions in your life more generally. It’s a content hub and that feeds back into our big platform – education and helping you reskill and retrain. Articulating the ways in which we have moved past traditional, static money relationship, and that feeds back into how our funds are constructed.”
Through Wealthness and its overall product design, Zuper is aiming to engage with members on themes of lifelong learning, education, and tapping into behavioural drivers behind financial decision making, including relationships, habits and how to retrain towards behaviours that align with members’ goals and values.
“We are telling people, yes, you can takes these actions and there are other ways where they can leverage and invest in themselves and gain skills, and that’s where Wealthness comes in,” Ellerm said. “Diversification is also about diversifying your own income and wealth creation strategies. Looking beyond returns in a very volatile and unpredictable market – what can you take ownership right now? Your career. You can tap into that, find huge gains if they look at the market and think smartly where the undersourced markets are and how to tap into that, that’s wealth creation as well. Yes, financial market will be volatile – what we can do is show members how to take control of their lives, and over the long run, they’ll be more successful b/c they’re in charge of their own wealth creation.”