Australian employees are not adequately informed about superannuation or the changes which are about to flow from the implementation of the Choice of Superannuation Fund legislation, according to a national study conducted by Aon Consulting.
What is more, a study conducted by the big health-based superannuation fund, HESTA has found that women are particularly disadvantaged on the question of making the right decisions in the new choice environment.
Aon’s annual Commitment @Work study has found that 51 per cent of respondents are likely to take advantage of the opportunity to choose their own superannuation fund, with the majority (63 per cent) being dissatisfied with the way their funds communicate investment information.
The study has found that the primary driver for employees deciding to change funds is investment returns.
And what should be disturbing to both superannuation fund executives and individual employers, is the fact that the study found that only 40 per cent of respondents intend to rely on their employer to keep them informed about the key issues surrounding superannuation fund choice.
Commenting on the study outcome, Aon Consulting managing director Stewart Fotheringham said the study highlighted the need to improve communication with employees surrounding the forthcoming changes.
“Employees have indicated they are interested in making their own choices regarding their superannuation, however they lack sufficient information to do so,” he said.
With only six months until the legislation comes into effect, the onus is on employers, super funds, industry bodies and the Government to educate employees on their options.
Working women stand to be particularly disadvantaged by the implementation of the new choice of fund regime, according to the HESTA data.
HESTA has released national research showing that 64 per cent of women do not think they know enough about superannuation to choose a fund, with women aged between 15 and 29 being particularly affected.
Commenting on the research, HESTA chief executive Anne-Marie Corboy said that with the deadline for the implementation of choice looming it was alarming that so many women were saying they did not know how to make the right decision.
Corboy pointed out that under the choice legislation, workers would have 28 days from July 1 to choose a superannuation fund.
“If people don’t educate themselves and make an active choice, they could find themselves in a default fund that doesn’t suit their needs,” she said.
Corboy said that the HESTA research had found that 55 per cent of men and 58 per cent of women were turning to financial planners or accountants for superannuation advice and people needed to understand that some of these planners received commissions for sending members to certain funds.
“It is important that consumers learn how to compare funds independently and start preparing now to avoid making hurried investment decision that will have a major effect on their retirement incomes,” she said.
Corboy said that in coming months people will be bombarded with marketing material from the retail superannuation funds trying to woo members away from industry funds.
“The challenge for women especially will be to concentrate on the essentials such as the security of their money, low fees and charges, returns and a fund that understands a woman’s life circumstances,” she said.
