The cut to the headline fee, from 0.55 per cent to 0.34 per cent, would translate to a $105 saving for a year for members with a balance of $50,000.
Choice members on the other hand, will see a slash to their headline asset-based administration fee of 35 per cent, from 0.6 per cent to 0.39 per cent.
The group has also shuttered its Mercer Growth product for choice members, with affected individuals being able to choose another product or be slotted into Mercer Select Growth by default.
Mark Thompson, head of the Mercer Super Trust, said the change would improve outcomes for members and strengthen Mercer’s competitive position.
“The superannuation sector is increasingly competitive, and members are more discerning than ever. As such, we’ve made a raft of changes that include fee reductions, simplification of products and processes and stronger sustainable investment products,” Mr Thompson said.
The other reforms include restructuring of the life cycle investment product Mercer SmartPath, with the addition of more growth asset allocation for older members.
For members born before 1964, the change will result in a shift to 60 per cent growth allocation assets, from the previous 60 per cent, while investment fees for the product will increase from 0.33 per cent to 0.38 per cent.
There will also be a delay to the start of the reduction to growth exposure from age 47 to 53.
For Mercer SmartPath members born before 1963, the company is reducing investment fees from 0.47 per cent to 0.44 per cent.
The group reported it has reduced investment fees for the majority of its members.
“Our greater scale and efficiencies achieve through the growth of our business have allowed us to pass on savings and benefits to our members without compromising the services we are delivering,” Mr Thompson said.
“While from an operational perspective it makes sense for us to simplify our product suite and create greater consistency across our products, it all boils down to our focus on improving the retirement outcomes of members.”
Meanwhile, Mercer has seen a lift in demand for ethical and sustainable investing, having simplified its ESG products.
All impacted Mercer Super Trust members will be notified of the changes in February, with the pricing and product adjustments to be applied from April.
There will be a temporary expense allowance increase of 0.03 per cent for three months to respond to the regulatory changes and investments in members’ services.
Sarah Simpkins
Sarah Simpkins is a journalist at Momentum Media, reporting primarily on banking, financial services and wealth.
Prior to joining the team in 2018, Sarah worked in trade media and produced stories for a current affairs program on community radio.
You can contact her on [email protected].
