UniSuper selects GBST for after-tax benchmarking

UniSuper has selected technology provider GBST for the provision of after-tax benchmarking solutions, which the company said could boost member portfolio returns by as much as 2 per cent each year.

From 1 July 2011, the new partnership would see UniSuper’s Australian shares managers have their performance calculated on an after-tax basis, with excess returns measured against a GBST-calculated S&P/ASX series of after-tax indices.

As super fund members accumulate their retirement savings and retire on after-tax returns, this could significantly boost the funds available to them on retirement, according to UniSuper’s head of portfolio analysis and implementation, Dharmendra Dayabhai.

He said the fund had been considering an after-tax benchmark and return methodology for some time and that the Cooper Review had heightened the issue.

“We recognise the importance of post-tax considerations and assessing after-tax performance means we are further aligning our investment managers to the best interest of our members,” Dayabhai said.

UniSuper noted the Cooper Super System Review by Gordon Mackenzie of ATAX University of NSW claimed the after-tax benchmarking and returns methodology could boost member portfolio returns by as much as 2 per cent each year.

The quantitative data services business, GBST Quant, provides benchmark solutions both pre- and post-tax. The custom benchmarks could range from slight variations to standard industry indices through to completely custom calculations, according to Neil Detering, head of GBST Quant.

“As the industry moves towards after-tax measurement and performance becoming the norm, the next challenge is for fund managers to make tax considerations an integral component of their investment process,” Detering said.