Although almost three quarters of Australians know their superannuation balance, half are not aware of the fees they pay, according to a new report from the Financial Services Council and ING Direct.
‘Superannuation – Australia's view 2013' found that although 72 per cent of Australians are aware of how much they have saved in superannuation for retirement, 52 per cent do not know the cost of fees charged.
FSC chief executive John Brogden said that Stronger Super reforms had begun to move the system towards greater transparency. However, fee disclosure and insurance (43 per cent of people did not know they had life insurance through super) were areas that needed improvement.
While most Australians (74 per cent) have default superannuation accounts and 64 per cent of respondents said they were unlikely to change funds, Brogden said the introduction of league tables and improvements to rollover processes could provide the impetus for members to switch.
"I think choice of fund will be used in the manner that it was always expected to be used," he said.
"When it's easy to move — number one — and there's more information and competition around fees," he added.
Currently most members (73 per cent) were aware of different fund options but few members actively discussed them: 66 per cent of respondents said engagement with their fund was limited to checking their bi-annual statements and many said they only "glance at their statement", according to the report.
Worryingly, under two-thirds of respondents believed they would have adequate super to fund their retirement, which led 40 per cent to make voluntary contributions if they could afford it and 55 per cent to invest outside of super in cash, shares or property.
Increasing the Super Guarantee to 12 per cent received widespread support (83 per cent) according to the survey, while 89 per cent knew that the purpose of superannuation was to save for retirement.
