There has been surprise at the level of ‘stickiness’ demonstrated by superannuation fund members, as 1.3 million have opted to remain in an underperforming fund.
While 89,000 members have exited an underperforming superannuation fund, this represented just 6% of the total members affected, according to the Australian Prudential Regulation Authority (APRA).
Responding to a question on notice during Senate estimates, the organisation said: “Data received to 2 February 2022 indicates that just over 89,000 members have exited their underperforming MySuper products since 30 August 2021, representing a 6.4 net decrease in total membership numbers. These exited member accounts held a value of $3.48 billion, 6.2% of the amount held in the underperforming products at 30 June, 2021”.
However, APRA highlighted that seven of the 13 underperforming funds were in the process of merging with another fund which would reduce the likelihood for underperformance in the future.
During the estimates, Senator Jane Hume, minster for financial services, superannuation and the digital economy, said the figure was encouraging that people were taking proactive action and that she had been surprised by the level of ‘stickiness’.
“I think it’s encouraging that 89,291 people have taken action of their own accord to move funds, and that’s largely because they received something in registered mail to say: ‘Your superannuation fund is underperforming and you probably don’t realise it,’ and that’s the first time that has ever occurred. So I think that’s an encouraging sign.
“We knew that, after the letters were received, there was still considerable stickiness. Did that take us by surprise? Probably, except for the fact that disengagement, as you know, has plagued the superannuation system since day one.”
