Australians are proud of our superannuation system, it’s world class. It’s provided millions of Australians with dignity in retirement.
And it’s a super-sized $3.3 trillion pool of capital for our economy to help build a better future.
We should acknowledge the diligent work super funds do for their members to grow modest monthly contributions into healthy retirement balances. But we should not be complacent. The strength of superannuation rests on three core tenets: political consensus, strong performance and member satisfaction.
The Government believes there is more super funds should be doing on the third of those tenets, as a recent report from ASIC found.
The corporate regulator’s survey of super funds discovered almost 20 per cent consistently fail to respond to complaints from members within the mandatory 45-day timeline.
Almost half of the time the reason for these delays is not outlined to members, as required.
When ASIC dug deeper, it found almost 80 per cent of funds’ complaint management systems were not up to scratch.
This needs to be a wake-up call for the industry. Doing right by your customer should be a nobrainer for any business, and that goes double for super funds.
Survey after survey shows Australians’ engagement with their super fund is low, especially among younger Australians.
More strenuous efforts must be made to address this situation, because when members engage with their super fund, everyone wins.
Workers and their families make better informed decisions about their financial futures.
And super funds gain the opportunity to demonstrate the value they are providing to their members in growing their retirement savings.
Responding to complaints in a timely and reasonable manner is a key part of growing engagement and building member satisfaction. Clearly super funds are not meeting that mark.
Ultimately, this is not just about giving those who have taken the time to engage with their fund the proper level of attention. It is about funds knowing and understanding all their members, even those who may not engage regularly or at all.
If that means more investment in systems and data, so be it. And if it means finding new and better ways to communicate with members, that can only be a good thing.
Laggards in addressing these issues will find themselves not just the subject of regulatory attention.
New competitors are emerging in the industry and the fight for members is intensifying.
For example, late last year Vanguard launched its first Australian super product.
This is a company that has built its reputation on innovation and customer engagement in other markets. I welcome this development and will watch keenly how the market responds.
The Albanese Government’s only goal for superannuation is to strengthen it.
We are doing our bit by overhauling transparency and reporting requirements on super funds so important financial data is clearly and consistently laid out for members. But we want to see the funds do their bit too and that begins with a greater focus on members’ satisfaction.
My message to funds is clear:
Focus on your members; respond to complaints more quickly; invest more in your relationship with members; and do better at understanding the needs of those who trust you with their contributions.
This is all the more important as contributions continue to rise.
The September quarter last year saw an extra $1.5 billion going into workers’ super accounts following July’s rise in the contribution rate to 10.5 per cent.
This year that rate will rise again to 11 per cent.
Funds and the Government are focused on getting the best return on these contributions to set members up for the best possible retirement. But it’s not good enough to just deliver strong returns, as funds consistently do.
Taking the time to have positive conversations with members should also be a priority.
