POWERED BY MOMENTUM MEDIA
(August-2002) Super funds living in fear of litigation
Super funds are living in fear of potentially crippling legal challenges resulting from the information and advice they offer to members, according to a recent Super Pulse survey by Towers Perrin.
This is despite survey respondents — from 21 super funds, representing more than half a million members and in excess of $37 billion in assets — acknowledging a greater need for member education.
All the survey’s respondents believed that none of their members were ‘fully knowledgeable’ on investment decisions relating to their retirement savings. However, 88 per cent stated that the main barrier against providing investment education to members was ‘fiduciary concerns’ over offering information and advice.
The survey’s main aim was to assess how funds were communicating to members the impact of a low-return environment on savings.
It reveals that 92 per cent of respondents believed members were expecting lower returns this year. It also found that one in five members has no knowledge on investment decisions relating to their retirement savings, and there are mixed views as to ‘how active trustees should be in educating members’.
Despite the fear about ‘fiduciary issues’, 56 per cent of respondents said they still intended to increase the level of education offered to members in the future.
Of the existing investment educational tools, detailed information through new member kits and annual reports (80 per cent) and web-based information (64 per cent) were the most widely used.
The most common forms of communication to members occur via a fund’s annual report (96 per cent), brochures and newsletters (80 per cent) and web sites (72 per cent).
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