More sophisticated methods expected for future super member communication.

Digital channels will play a substantially greater role in member engagement over the coming three years, with more complex websites and email correspondence overtaking paper and face to face communication.

Link Group is Australia’s leading super administrator providing member services for around 4.5 million Australians. This month Link surveyed the CEOs, CFOs and fund executives of its largest super fund clients, asking their views on how they will engage with members in the coming three years, and the changing drivers of digital engagement including social media. The responding funds represent more than three million members.

Speaking at the annual Association of Superannuation Funds of Australia conference in Perth yesterday, Link Chief Operating Officer  told delegates that the vast majority of (80%) respondents believe the best digital channel to engage members is the fund’s website.

This is in line with member statistics from Link Group which show the number of website visits per day increased a whopping 48 per cent between December 2009 and December 2012. The trend coincides with a strong increase in inbound emails from members of approximately 38% for the two year period to July 2013.

“Most superannuation funds are finding the website as the main digital touch point for members to consume information and transact, but members are also increasingly starting the conversation with funds via email.  Our administrator teams are also seeing increasingly complex email and phone inquiries which points to members becoming more confident, savvy and educated,” Ms Holden said.

While the majority of fund respondents said member engagement was currently being driven through face-to-face (70%) and paper collateral (80%), 80% of those surveyed agreed this was likely to change over the next three years as digital channels become increasingly important in attracting and retaining members.

Interestingly, despite this understanding of digital media changing how funds engage with members, only 30% believed social media channels (Facebook, Twitter, LinkedIn) would be a key driver of engagement in the future – however 80% believed these channels were required to monitor customer complaints and better understand the conversation.

“We can see that digital encompasses a variety of channels, not just social media. Social media can be a channel to further enhance member engagement and experience but for most funds, the priority still remains on the website, online forms and search engine optimisation,” Ms Holden added.

Half the funds surveyed had never used social media platforms such as Facebook, Twitter or LinkedIn or other content channels such as YouTube or podcasts.

“Social media may not be the main point of contact for member engagement for funds in the future but the survey respondents all agreed its influence is likely to increase over time. This represents a potential gap in the market as another communications channel for funds to engage with members,” Ms Holden said.

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Forty seven superannuation funds representing over 4 million members have for the first time completed the successful lodgement of electronic reports to APRA as part of the new reporting standards outlined in the Stronger Super reforms.

Orient Capital, the technology solutions provider, worked collaboratively with superannuation administrators AAS and Link Super to meet the 28 October due date for APRA reporting, in what is believed to be the first successful electronic lodgement of fund reporting as part of SuperStream measures to automate the industry.

From the September quarter, APRA substantially increased the information required to be reported by superannuation funds while reducing the time funds have to report.

Paul Gardiner, Chief Operating Officer of Orient Capital, said: “What we have achieved using a complete electronic end to end solution for APRA reporting has not been achieved by any other superannuation administrator as far as we are aware. It is a testament to our staff, client focus and broad expertise of the different subsidiaries in Link Group.”

Prior to this electronic solution, reporting to APRA was a manual process involving spreadsheets. However, with the increased requirements and tighter deadlines of Stronger Super, manual processing of data to report to APRA would be an unsustainable solution.

“By using Orient Capital’s miraqle platform, we have been able to load and validate large amounts of complex accounting, investment and Trustee information and lodge via APRA’s electronic reporting portal. Funds now have access to all their data and can sign-off via the miraqle platform, making the process completely electronic,” said Mr Gardiner.

For this quarter, Orient Capital electronically reported for 47 superannuation funds, drawing information from three administration systems, three accounting systems, four custodians and multiple asset managers.

Key requirements from superannuation funds using electronic APRA reporting were usability, traceability and auditability.

Commenting on the electronic reporting experience as a client, Megan Bolton CEO of Kinetic Super said: “The provision of the miraqle APRA Reporting product by Orient Capital was a key factor in the successful submission to APRA of our reporting obligations under the new reporting standards.

“The co-ordinated import of data from the fund custodian and administrator into miraqle and the workflow built into the product enabled progress to be monitored at every stage and  the process to be completed on schedule, while the audit and traceability functionality built into miraqle provide the confidence that we are meeting APRA expectations in that area.”

Mr Gardiner said the group would continue to develop its electronic reporting solution to meet future obligations.

“We’ve worked very closely with the senior technical staff at APRA throughout this journey with a significant amount of end to end testing undertaken to ensure the best possible outcome for our clients,” he concluded.

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Changes to super will reduce paperwork.

The coming three months will see Australian employers and their myriad of superannuation providers digest some of the biggest systems reforms since the introduction of the GST.

The joint employer and super industry effort will deliver Australians one of the most streamlined retirement systems in the world – enabling people to consolidate funds or change their provider in days without cumbersome paperwork.

According to Link Group (Link), Australia’s leading super administrator, the upcoming changes to electronic contributions and rollovers for superannuation funds will have the most transformational impact on Australia’s super system since the savings scheme was introduced.

As part of the wide ranging Stronger Super reforms, four key deadlines are looming for the industry and employers:

• From 1 January 2014, all APRA regulated super funds must process and fund a member rollover request within three days – rather than the current 30 days.
• From 1 January 2014, all APRA regulated super funds must be compliant with sending and receiving electronic rollover (eRollover) instructions.
• From 1 July 2014, all Australian employers with more than 20 employees will be required to send employee super contributions electronically (eContributions).
• From 1 July 2015, all Australian employers will be required to send eContributions resulting in 800,0001 employers potentially being affected by eContribution changes.

John McMurtrie, Managing Director of Link and chair of super administrators industry group, Affiliation of Superannuation Practitioners, said the industry was likening the impact of eContributions changes to the introduction of GST, fundamentally altering the way businesses interact with clearing houses, payroll systems, superannuation administrators and funds.

He said while many employers were already making super contributions electronically, anecdotal evidence suggests approximately half of companies across Australia still used some form of paper-based instructions.

“The changes signal a major coming of age for our superannuation system and now require the time and attention of all employers. After 20 years, the days of receiving employee contribution cheques with instructions written on the back of a pizza box or Post-It note are coming to an end,” Mr McMurtrie said.

He said the changes would substantially benefit all players in the long run, but in the short term the pressure was on super funds as well as employers to establish how they can best comply with the new rules while maintaining reasonable costs for members.

McMurtrie also suggested that the incoming Government reduce red tape by abolishing the $3,800 fine to be levied on employers who contribute non-conforming data.

Easing the transition

To ensure a smooth transition, Link is working closely with the ATO to pilot eContributions before 1 July 2014, minimising the impact to businesses while still ensuring the rigour and efficiency of digital contributions.

“As part of the consultation process, we are working with the Government and regulators to look at range of e-Contributions solutions. Many employers are already adopting a form of eContribution payments which may not be specifically compliant with new ATO standards. We believe these non-compliant systems, which effectively provide the same outcome, should be accommodated in order to minimise compliance costs for employers,” Mr McMurtrie said.

Link is the first administrator to be fully compliant with each wave of the new regulatory deadlines, making the industry’s first official eRollover transaction for AIMST, Christian Super and Russell Superannuation Master Trust under the new system on 26 August this year. Major super fund administration clients such as REST, CARESuper and Kinetic are also fully compliant with the eRollover requirements ahead of deadline.

Changes expected to awaken members

From 2014 Australians will also see major improvements in the ease with which they can change super funds – including the ability to switch funds online.

While prompting improved fund consolidation, the easier rollover processes may also see an increase in fund switching, and have coincided with some of Australia’s leading super funds redoubling their marketing presence in an effort to attract and retain members.

According to McMurtrie, changing or consolidating super funds has proved so cumbersome to date and conservatively estimate that more than half of people who embark on the process end up giving up before the process is completed.

“Members are fed up with the red tape around their super and we are pleased to be leading the charge amongst administrators to drive home reforms that will ultimately benefit every Australian – in particular the opportunity for people to feel more in control and to become more engaged with their super fund,” Mr McMurtrie said.

He said a more mobile member base would continue to put pressure on super funds to offer a best of breed suite of investment, insurance and other services – while still maintaining competitive costs.

McMurtrie also recommended that the complex, risky and very expensive Government initiated auto-consolidation program be dropped.

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John McMurtrie

Link Group (Link), Australia’s largest and fastest growing third party record keeping company, has cemented its market leadership in the superannuation administration space, today announcing the acquisition of Syncsoft, Australia’s leading software vendor for APRA regulated superannuation funds.

The move will enable Link to substantially expand its current client base of super funds who choose to outsource their superannuation administration, to include funds who administer in-house via the Syncsoft platform, as well as hybrid administration arrangements.

Syncsoft provides technology and software services through its leading Capital superannuation administration software. Designed to automate and streamline administration processes for major superannuation funds, clients currently using Capital include the $16bn Western Australian public sector GESB, $36bn UniSuper and Comsuper, the agency responsible for administering the major superannuation schemes available to the Australian Defence Force and the majority of Australian government employees.

The acquisition further builds on Link’s core administration offering to wealth managers and superannuation funds, with Link now providing administration support for over six million superannuation members on its platforms.

John McMurtrie, Managing Director of Link, said the acquisition builds on Link’s strategy to own and continually invest in platforms it operates.

“Syncsoft strongly complements our existing offer to superannuation funds, allowing us to not only broaden our family of clients across industry, public sector and corporate funds, but to have new conversations around our value added solutions with funds currently using the Capital software,” Mr McMurtrie said.

“Super administration is Link’s core competency and the addition of Syncsoft further increases our economies of scale and delivers the ability to service all funds – including those which currently retain administration in house on platforms and technology owned by Link.”

Responding to member demand

In addition to core member administration services, Link offers a range of value added services to funds including data analytics (via Empirics), financial advice (via Money Solutions), an integrated clearing house, and a Direct Investment Option which allows funds to offer members increasingly popular direct investment options such as the ASX300, ETFs or Term Deposits.

Mr McMurtrie said the ability to offer a robust and flexible administration infrastructure in addition to key value added services was now critical for funds as technology continues to advance and competition for members intensifies.

“Through joining forces with Link, Syncsoft will be able to continue enhancing its Capital offering by integrating the value added services provided by Link such as the effective management of big data, direct investment options and automated APRA reporting,” Mr McMurtrie said.

Syncsoft will continue to operate from its Melbourne office with all 78 employees joining Link. Rory Wainer, Managing Director and founder of Syncsoft, will remain in charge of the business while also expanding his role to leverage Syncsoft’s intellectual property across all of Link’s subsidiaries.

“We’re excited to have Rory, a true innovator and leader in financial services technology, join the Link family. His story is truly remarkable, starting Syncsoft in the 1990s with the mission of building a genuine scalable institutional wealth management administration platform.”

“Today it is clear he has achieved his mission and the company has remained at the forefront of industry solutions for over 20 years. We believe this is just the beginning as we partner with Rory to expand Syncsoft’s offering to an even wider audience, not just for superannuation but wealth administration across the globe,” Mr McMurtrie said.

This wider audience includes offering administration services globally including New Zealand and China where the Capital software has already been adopted due to its robust yet customisable nature.

Mr Wainer shared his excitement about the prospects of joining the Link Group: “Being part of the Link Group was the logical next phase for Syncsoft and Capital utilising the Group scale and capability to expand the Capital platform more rapidly than otherwise possible. We were impressed by Link’s culture and commitment to be a genuine industry leader through their investment in people and technology to deliver superior long-term outcomes.”

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Under the new arrangement Link Group will integrate Russell’s Australian superannuation administration business, with the view to the two firms offering existing clients and the broader market a joint ‘best of breed’ administration/investment service.

Russell’s 130+ strong administration team will join forces with Link’s administration team – creating an administration powerhouse overseeing $100 billion in assets and further cementing Link’s position in the increasingly competitive super environment. The alliance is designed to have Link take on all administration duties for Russell’s stand alone administration super clients together with the employer clients in the $5.3 billion Russell SuperSolution MasterTrust.

Link Group Managing Director John McMurtrie said he was excited to welcome Russell staff and clients to the 1,800 strong Link Group, which currently provides administration services to more than four million Australians. Current Link clients include REST, TWU Super, Tasplan and CareSuper.

“Our objective is to continue to deepen our scale and member footprint in the highly competitive superannuation member administration industry in Australia. Having completed our almost $200 million investment program over two years ago we are in a strong position to support all of our clients through an uncertain regulatory environment.”

Stronger Super takes hold

The move comes as super funds face a challenging year ahead with an increased focus on individualised member engagement as well as new transparency measures, reporting requirements and regulatory compliance under the raft of Stronger Super reforms.

Russell Chief Executive Asia Pacific, Alan Schoenheimer, said this created a highly complementary alliance which would allow super funds to access the scale and technology of one of Australia’s leading administration platforms – together with the global scale of Australia’s leading multi-asset investment firm.

“Link Group is an excellent fit for Russell given its demonstrated investment in systems to deal with the rapid changes to Australia’s superannuation environment,” Mr Schoenheimer said.

According to Mr Schoenheimer, long-term success in the Australian superannuation sector not only requires strong investment capabilities but also strong administration expertise. This might, for example, include increasingly sophisticated big data capabilities allowing funds to better leverage large volumes of investment and member data to achieve more tailored member engagement.

“In this competitive environment, firms in the super industry will need to focus on their specialty. We believe there will be a trend towards super funds decoupling their administration and investment arrangements in order to access best of breed providers in the industry to ensure both the investment element and administration element remain highly competitive – all the while controlling costs.

“Given Russell’s core global focus on providing multi-asset investment solutions, this alliance ensures our clients will continue to have the best combination of investment and administration services available in this market. We believe the alliance will be a particularly attractive proposition for mid-size super funds and self administered funds,” Mr Schoenheimer said.

Since acquiring Australian Administration Services (AAS) in 2006, Link has invested significant capital to expand its superannuation operations and fulfil its vision of being an innovator in super administration and a superior provider of member services. Recent innovations have included new contact centre technology to allow more interaction with members, and a new web interface for employers encompassing a clearing house and superannuation member analytics capabilities via Link subsidiary Empirics – a leading provider of end-to-end customer management solutions.

The new alliance will see Link absorb all of Russell’s existing administration systems and technologies. All of the permanent employees in Russell’s administration business and contact centre migrating across to Link will be offered a role on comparable terms, including recognition of existing tenure, and with the opportunity to access wider career choices. Link will now be the pre-eminent defined benefit administration services provider in the Australian market.

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