How the best super funds deliver on member services 

What are member services?

Member services typically include:

• Educational resources such as online articles, videos, seminars, tools and calculators
• Life insurance, including death cover, total and permanent disability (TPD) insurance and income protection insurance, often at discounted group rates
• Financial advice, including free general advice about your super, comprehensive personal advice from in-house or external licensed financial advisers and, increasingly, interactive digital advice
• Member discounts on products and services, such as home loans, depending on the fund and the profile of its members.

The glue that holds all these services together is communication, from the annual member statement, annual reports and market updates to more targeted messages and nudges.

‘Nudging’ members to act

As 30 June approaches each year, chances are you’ve received a text or email from your fund reminding you to make any last-minute tax-deductible personal contributions. Once you turn 60, the messaging is about retirement planning and pension options.

These are examples of the trend towards ‘nudging’ individual members towards action with the potential to improve their retirement outcome. So rather than send a group email to prompt all members to consider making a co-contribution, funds are increasingly using data to identify which actions are most likely to benefit individual members.

For younger members, these nudges might include information on things like:

• How to make additional contributions
• Understanding your investment options and what is the most appropriate option for you
• Understanding your insurance needs and getting the right level of insurance.

As you get closer to retirement, you may be encouraged to work out:

• What level of retirement income you will have if you keep doing what you are doing
• How much you think you will need in retirement
• If there’s a gap between the two, your fund might suggest what you can do to make up the difference.

What about members in retirement phase?

Member services for people who are withdrawing retirement income are less developed than services for members who are still working and accumulating super. This has been a glaring omission, given the complex decisions that need to be made in retirement phase, but the good news is that a handful of funds are upping their game with the help of digital advice and tools.

Not only are there decisions around how your super pension is invested and how much you should withdraw each year, but you also need to consider how your super interacts with the Age Pension, investments outside super and home ownership.

While a lot of funds offer retirement calculators that allow pre-retirees to enter their current balance and contributions and estimate their retirement balance and income, there are fewer tools available for retirees.

For instance, Fryer says a retiree might want to ask: “I’m 70 and I’ve got $300,000 in super; what should I do with that? If I draw down $20,000 a year, how long will that last?”

It’s the same with advice. Most funds have a strong focus on providing financial advice to members as they approach retirement, which is a critical time. But funds that provide tailored guidance for members in retirement phase tend to be big funds with a high proportion of pension members.

What separates the best from the rest?

Better funds are using data on their members to understand their individual needs. They collate this information to work out how and when to communicate with members about actions that could improve their super.

Better funds also present information in an engaging way using videos, graphics and images to grab members’ attention and make it easy for them to act on what is being suggested.

Funds are also beginning to deliver consistent, personalised prompts across multiple channels, because every member will have a preferred method of communication. So how does this work in practice?

Don’t overlook your annual statement

Potentially the most effective communication tool is the annual member statement because it gives a snapshot of your superannuation vital statistics in dollars and cents.

Fryer says better funds don’t just present your account balance, they also provide a projection of your retirement balance and annual retirement income if you continue on your current trajectory. For example, it might say you’re on track to have $50,000 a year in retirement, including the Age Pension.

That’s useful information because you can then think about whether you are doing enough or whether you may need to make additional super contributions.

Better funds are also introducing more interactive statements. For example, there may be a retirement benefit projection you can click on that takes you to a retirement calculator pre-populated with your personal information. You can then play around with how much extra you would need to contribute to get where you need to be.

How to recognise good service

One of the difficulties in assessing which funds offer the best member services is that it can be hard to tell what they are doing well, or not so well, until after you’re a member and need help or guidance.

Essentially, you need a fund that makes it easy for you to find answers to questions such as:

• How am I tracking towards retirement?
• Am I in the right investment option?
• Am I making the right level of contributions to achieve my desired retirement income?
• Do I have the right type and level of insurance?

Once you are close to retirement or already retired, you may want to know:

• How much can I afford to withdraw from my pension account each year without worrying about running out of money?
• Am I in the right investment option?
• Should I consider a lifetime pension product alongside an account-based pension?
• How can I maximise the amount of Age Pension I receive, or become eligible for a part Pension and the benefits that come with it?

So, if you are thinking of switching funds or simply want reassurance that your fund stacks up against the best member services, here are some places to look:

• Dig out your latest annual statement and see if it includes information that helps you work out whether your retirement savings are on track and, if not, what you might do to improve your retirement outcome.
• Go to your fund’s website to see if they are going out of their way to connect with you in a language you understand.
• Check the latest super fund awards here on SuperGuide and look at the websites of any you are interested in. While Chant West has a separate award for member services, as well as awards for advice services and digital advice that contribute to the member services rating, SuperRatings has separate awards for member education, advice, service quality and digital advice, all of which are aspects of member services.
• Some funds allow you to compare your fund with up to two others using Chant West’s AppleCheck service. As well as member services, you can compare fees, performance and insurance.

Improving service standards

After criticism from members and the industry regulator, the Australian Prudential Regulation Authority (APRA), some funds are beginning to address lengthy and unacceptable delays in claims processing for death benefits and insurance, as well as dispute resolution. 

A handful of funds now report on their claims and dispute handling, including outcomes. For example, Hostplus publishes a quarterly Service Standards Report on its website, while Aware Super publishes its Member Service Standards Report annually.

While funds still have a lot of work to do in this area, greater transparency and signs of improvement in member outcomes are welcome.

The bottom line

At last, the focus on superannuation performance and fees is expanding to include member services, as funds develop their human and digital advice, member education, personalised communication, calculators and tools.

There are also signs that some funds are beginning to focus and report on service delivery after criticism of widespread delays in claims processing times and outcomes.