NSW government-owned member administrator, Pillar, is negotiating with its clients to base fees on activity as well as member headcount after better-educated fund members and a market downturn have increased its workload.

Peter Beck, chief executive of Pillar, says the administrator aims to be paid activity-based fees from the majority of its clients by the end of the financial year. “If activity goes up 50 per cent, it is like membership going up by 50 per cent,” Beck says. “There is more money coming into super, but we still get a member-based fee to administer it. We are struggling to maintain service levels.”

Beck says the proportion of members contacting the Pillar call centre has doubled in the last two years, while there has been a comparatively “modest” increase in actual membership numbers over that time. He says the credit crunch and its impact on superannuation accounts has “substantiated” Pillar’s argument, since the administrator’s call centre has been inundated by enquiries from concerned members since January. In response, the administrator has increased its call-centre staff numbers by 20 per cent.

Mark Luciano, general manager of business and marketing at Pillar, says members are now better informed and are asking more complex questions than in past years. “Because members are engaged, educated and empowered, their enquiries are more detailed and frequent,” he says.

“The ability to transact online is there but for some reason people want to pick up the phone and talk to someone.” Pillar initiated the debate to transfer to an activity-cost fee model. Beck says that clients are “wrestling” with the proposed change.

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