The client situation
Rice Warner was appointed by a global investment bank to conduct a tender for its corporate superannuation arrangements. The employer:
- Had concerns about the governance record of their incumbent provider as a result of the findings from the Royal Commission.
- Was looking to ensure its employees’ superannuation savings were with a modern, market leading product provider.
- Was very conscious of its obligation to seek a provider that was culturally aligned with the employer on important and emerging social issues such as governance, transparency and meeting social expectations for doing the right thing.
The employer views superannuation as a key part of its employee value proposition, by subsidising administration fees and insurance premiums, and was looking to ensure it received the best value for this cost.
Rice Warner held an initial discovery workshop with key stakeholders from the employer, to establish the employer’s criteria for success and identify what it was aiming to achieve through the tender process. We also:
- Focused on project definition and planning, to ensure that the project was built on a sound foundation.
- Established the objectives of the employer and isolated the potential obstacles that needed to be addressed as part of the process.
- Set up the governance framework for the whole process, establishing an employer steering committee to oversee the review process.
- Provided a framework to assist the client, based on our past experience, our knowledge of the market and what we identified as being important to the client.
As an output of the discovery workshop, we determined the allocation of weightings for the tender assessment to reflect the employer’s key objectives and criteria for success. We then developed a comprehensive Request for Proposal (RFP) document based on these objectives and assessment criteria. This RFP was issued to a selection of funds which, in consultation with the client, were determined to be a potentially appropriate partner for the client.
Rice Warner then conducted a detailed assessment of the tender responses and delivered a recommendations report for discussion with the client. Based on the employer’s criteria for success we were able to determine a shortlist of suitable superannuation providers for further analysis, due diligence and subsequent negotiation.
Following the tender process, the two shortlisted funds conducted presentations to the client which allowed for an in-depth assessment of cultural alignment, as well as negotiation of terms before a final recommendation was made. Rice Warner facilitated the presentations and led the negotiations on behalf of the client. The client ultimately determined to move to a new superannuation provider.
Outcome for the client
The employer partnered with a new superannuation provider which was able to better demonstrate cultural alignment, lower fees and insurance premiums and stronger potential member retirement outcomes. The employer also benefitted from significant cost savings, from the decrease in administration fees and insurance premiums, which were negotiated with the superannuation provider.
The new provider also demonstrated stronger governance practices, which provided the employer comfort with the knowledge that its employees’ retirement savings are safer and their interests are protected.