Super funds to build trust

Sean Smith
Superannuation funds need to work harder to gain trust to meet the rising expectations and needs of their members, the industry’s Australian peak body has told its annual conference in Perth. Pauline Vamos, the chief executive of the Association of Superannuation Funds of Australia, said while the industry was playing an increasingly important economic and community role, it had to address some of the more persistent concerns and “awareness gaps of members. “We know people struggle with terminology in annual statements (and) it is hard to understand how fees are calculated and investment returns arrived at,” Ms Vamos told the conference “They also want a thorough breakdown of administration fees, tax deductions and dividends, a chart of the projected income as well as articles about retirement planning.” The concerns were highlighted by a survey carried out for ASFA by research firm CoreData. The findings, released on the first day of last week’s three-day conference, also cited excessive paperwork, exit fees and myriad rules and requirements as the greatest irritants for members wanting to consolidate accounts. “There is resentment that consolidating super accounts is so complex,” Ms Vamos said. “Interestingly, most – over 65 per cent -agree that inactive or dormant super funds should be automatically consolidated in to the main superannuation account unless they opt out. We need td rethink our response to automatic consolidation. “It will be no surprise that only about 17 per cent of the sample is very confident they know how much retirement savings they require to live comfortably. ”And still about 22 per cent of members don’t know how to make extra contributions.” Ms Vamos said the findings represented “a communication opportunity” for the industry. “The more we are connected into the broader community, the more we can build trust with them, as well as with policy-makers, and the more we can continue to play an integral role in designing and delivering the superannuation system,” she said. “Over the past few years, the level and quality of information provided by individual funds to members has improved but … there are some significant gaps when it comes to fund members understanding how their super works.” Ms Vamos said this required regulatory change, as funds were restricted in what information they could provide to members.