Despite the strong policy emphasis currently on superannuation account consolidation, research by Vanguard has found that very few members rollover their funds.
The research, conducted with First State Super, Sunsuper and VicSuper, found that only four per cent of members rolled their funds into another Australian Prudential Regulation Authority (APRA) regulated funds in FY2018, and one per cent only made a partial rollout. Less than 0.5 per cent of members rolled their super funds into a self-managed superannuation fund (SMSF).
For those who did rollout funds into other funds, the How Australia Saves report found that: “Members rolling benefits out tended to be younger and had smaller account balances. It is likely that many of the rollouts were undertaken by members who had accounts with two or more different funds, stemming from multiple employment relationships.”
Despite funds offering varied options, the research also showed that members showed a clear preference for defaults, with 87 per cent of all accounts looked at invested solely in MySuper offerings. Members weren’t keen to change their options either, with only three per cent making one or more portfolio switches last financial year.
Very few were willing to try extreme asset allocations, with just one percent investing exclusively in growth assets and the same amount having no allocation to the asset type. More self-directed investors were, on average, choosing more conservative asset allocations, with allocations from this group to growth assets sitting at 59 per cent, compared to 69 per cent of the general population.
Finally, the research showed that numbers of members making additional contributions remained low, with just 12 per cent making salary sacrifice or non-concessional contributions in the last three years.
Self-directed and female members both made more contributions. Twenty-five per cent of the former put extra money into their super, while female members across all investor types made more con-concessional contributions than their male counterparts.
