Australians paying closer attention to super amidst the global pandemic: Report

King Loong Choi

Investment Trends has released its 2020 Super Fund Member Sentiment and Communications Report, an in-depth look at the attitudes, needs and priorities of Australian super fund members.

Key highlights:

• Australians are paying closer attention to their super amidst the global pandemic
• Education leads to greater member engagement and confidence
• ESSSuper and UniSuper stand out for member satisfaction

Australians are paying closer attention to their super amidst the global pandemic

Australians believe the COVID-19 pandemic will have a lasting impact on their investments and finances. In the aftermath of the sell down in equities in early March, half of super fund members believe it will take 12 months or longer for their super balance to recover fully. Less than a quarter (23%) expect a full recovery by the end of 2020.

“The global pandemic and its resulting market volatility have prompted Australians to pay closer attention to their super. Their engagement with their super investments is growing, meaning that super fund members are now more active stewards of their money,” said King Loong Choi, Senior Analyst at Investment Trends.

“As members scrutinise their super balance and performance more closely, it is important that super funds continue keeping members informed, educated and confident in weathering heightened market volatility,” said Choi.

“At present, just 61% of members believe their super fund’s range of investment options is sufficient to meet their needs while 31% say they are unsure, further highlighting the need to alleviate members’ knowledge gaps.”

Education leads to greater member engagement and confidence

Most members (68%) have actively sought guidance from their super fund, particularly to find basic information such as fees and insurance premiums, their likely balance at retirement and the balance needed to retire comfortably.

As Australians engage more directly with their super fund, their satisfaction and confidence rises. Those who sought guidance tend to be more satisfied with their funds’ efforts to help them feel confident about the future (composite satisfaction score of 72% vs 65% among those who have not sought guidance).

“It is vital that super funds continue promoting and facilitating their member guidance services, given its positive, tangible impact in lifting member engagement and confidence,” said Choi.

“Confident, well-supported members are more satisfied with their super fund and empowered to take steps to improve their situation in retirement. After seeking guidance from their super fund, three in four members are driven to take action, most often to compare super funds (23%), make voluntary contributions (20%), consolidate their funds (19%) or change investment options (19%),” added Choi.

ESSSuper and UniSuper stand out for member satisfaction

Industry wide, members’ overall satisfaction with their super fund only declined marginally in the past year despite headwinds from the pandemic and recent legislative changes (composite satisfaction score of 67%, down slightly from 68%).

ESSSuper (82%) and UniSuper (80%) remain the highest rated super funds, while Australian Catholic Super (77%) overtook Cbus (76%) for third spot.

“Super funds have done well to maintain member satisfaction levels despite unprecedented macro headwinds,” said Choi.

“At the industry level, the communications provided by super funds during the pandemic have been effective in lifting satisfaction ratings and reducing associated satisfaction gaps. However, there is still room to improve the frequency and quality of communications outside of annual statements.“

About the report

The Investment Trends 2020 Member Sentiment and Communications Report provides a detailed analysis of the Australian superannuation industry, examining sentiment, attitudes and needs of superannuation fund members.

Based on a survey of 6,383 respondents, the Report is the largest and most comprehensive independent study of Australian super fund members.