Some super funds are requiring draconian amounts of paperwork to discourage members from rolling over to another fund, says technology provider Cuscal.
In requiring large amounts of documentation and proof of identity, “some funds are using this process to retain members through unnecessary steps”, said Cuscal’s general manager, Adrian Lovney (pictured).
Minimum levels of documentation “require co-operation between funds”, Lovney said, “and this possibly needs to be mandated”, either by the industry itself or from outside.
Lovney’s comments come as REST joins the IFF Rollovers Hub to send rollover payments electronically.
With $18 billion in funds under management, REST is Australia’s largest superannuation fund by membership (with 1.9 million members), and it joins Sunsuper, Statewide, HealthSuper and ComSuper in the move to electronic rollovers.
Major retail funds are also looking at joining the IFF (Industry Funds Forum) e-commerce Rollovers Hub.
Since Sunsuper and StateWide began transacting rollovers live between each other in August, more than 200 rollovers to the value of more than $1.4 million have occurred.
The hub is the first industry-based initiative in response to SuperStream, and uses Cuscal’s Clicksuper e-commerce platform.
This incorporates technology by Payment Adviser, and can process payments in two ways. The first is by direct credit (a ‘push’ payment) in which case – if the instruction is sent before 3pm Monday – the rolled-over funds will arrive on Tuesday.
The alternative method – which is the most common at present – uses direct debit (a ‘pull’ payment) in which funds are received a day later: if the instruction is sent by 3pm Monday, the funds will arrive on Wednesday.
Sunsuper’s Francis Cox, who is general manager IT and operational capability, said the fund had worked closely with Cuscal on the necessary protocols, and so the project had gone smoothly.
“We’re two-thirds of the way there,” he said. “The processing of rollovers – both in and out – is now substantially integrated with the receipt of contributions.”
The remaining part of full electronic integration would be the backoffice reconciliation of payments, he said.