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Communication - A whole new world
Member communications have always been an important part of the services provided by superannuation funds, but the advent of the new choice regime means it has become a high priority, high budget area in 2005.
In fact, many of the major retail super providers have been beefing up their spending since the beginning of the 2004-05 financial year, while the industry super funds have been gradually cranking up their profiles in an effort to make sure their members understand precisely what they are getting.
At the same time, the big houses such as Russell and Mercer have analysed the dynamics surrounding choice and have developed strategies aimed at maintaining their position in the marketplace.
About the only thing now delaying a deluge of advertising hitting mail boxes, television sets and radios of fund members is the length of time it is taking the Government to release the final regulations which will govern the choice regime.
But while plenty of money will be spent on communicating with ordinary super fund members, the priority for most funds will be employers.
Why? Because employers represent a pivotal point when it comes to choice. The decisions taken by employers with respect to default funds and administrative arrangements are seen as crucial to how choice will evolve.
The importance of communicating with employers has been reinforced by the director of AMP Corporate Superannuation, Greg Healy, who states that “AMP is dedicated to helping our employers under the choice legislation”.
“We are working closely with each of our employers to help them determine whether their current benefit design will meet all the requirements for a default fund,” he said.
AMP, like other organisations, is using a full range of channels to get its message out to both employers and employees.
Over the past six to eight months, AMP has developed a guide that provides basic information to employers about their obligations under choice and followed this up in December with a roadshow where experts outlined the various regulatory proposals and how they would impact employers.
AMP intends holding further roadshows when the regulations are made public.
Russell has taken things a step further, offering employers the ability to outsource most of the primary functions required by the new choice environment.
The Russell initiative, launch- ed as an updated version of its SuperSolution product, looks like a smart strategy in circumstances where there is widespread agreement that many employers won’t be ready.
Russell’s managing director, Alan Schoenheimer said the upgraded SuperSolution package is aimed at relieving employers of the complexities associated with choice.
The approach being taken by Mercer Human Resources Consulting is somewhat different, With David Anderson saying Mercer is not only working closely with employers to ensure they are prepared, but also drilling down into its database to target those fund members it believes are most at risk.
It is no surprise, then, that AMP was not alone in producing a guide to the way in which choice would work, with ING Corporate Super also producing highly specific documentation aimed at telling clients that, “As an ING Corporate Super member, you are already in control, with a super plan that offers you choice”.
On the industry funds side, the big Australian Retirement Fund (ARF) has followed a similar path with respect to having direct contact with its members.
In Victoria it has scheduled an information evening with its members to be held at the Melbourne Convention Centre, with proceedings then being broadcast via the ARF website.
Like Healy, the chief executive of ARF, Ian Silk, sees communicating with employers as a priority and laments the length of time it is taking to finalise the regulations which is making it difficult for funds to give employers the precise information they need.
While budgets have been boosted within most organisations to cope with the advent of choice, that does not mean they are expanding significantly beyond their normal communications tools.
Aside from AMP’s roadshows and ARF’s meetings and webcasts, most funds are taking a conventional approach, with the Superannuation Trust of Australia’s Susan Fairley making clear that the fund will be using all its traditional methods, such as half-yearly statements and e-newsletters.
“These represent quick and easy ways to communicate with members, particularly when you consider the costs associated with mail-outs,” Fairley said. “However, we may look at direct mailing to non-active members to inform them of opportunities with us.”
AMP’s Healy cautions that people should not expect too much change to flow from choice too quickly, arguing that greater change is likely to evolve 12 to 18 months down the track as consolidation continues.
He said, ultimately, scale would be a crucial factor in terms of the ability of funds to finance the appropriate technology at the same time as delivering lower cost structures.
AUTHOR
Mike Taylor
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