Pension phase specialists have singled out placing customised retirement income projections on statements as a top priority for improving member outcomes.
A recent poll of superannuation industry professionals found more than half believed improving engagement should be the number one priority of funds keen to help members achieve their retirement income dreams. And while numerous super funds have launched upgraded websites over the past few years – usually accompanied with fanfare – fund executives have identified statement projections as a more effective form of engagement.
The poll – taken among delegates at the Conexus Financial Post Retirement Conference, held in Sydney on March 14-15, 2017 – found 56 per cent of respondents identified “member engagement” as the top priority for helping people make their income dreams a reality after retirement.
This overshadowed the perceived importance of building a comprehensive income product for retirement (CIPR), which 27 per cent of respondents identified as the top priority for improving members’ post-retirement outcomes.
Only 8.5 per cent of respondents picked digital advice as the top priority for improving post-retirement outcomes for members, while a mere 6 per cent nominated face-to-face advice.
When the roughly 170 post-retirement specialists at the conference were polled on what they believed was the most effective way to improve engagement, more than half (54 per cent) said placing customised retirement income projections on statements.
“Projection statements help build that sense of urgency, so it helps people identify their gaps and takes them to a step of action,” Mine Wealth + Wellbeing chief engagement officer Glenda Abraham said.
Online tools, such as retirement income calculators on fund websites, were identified by 18 per cent of respondents as the best way to improve member engagement.
“As we know, advice is core to people having peace of mind in retirement and that is where retirement tools and calculators kick in, from a member-engagement perspective,” Abraham added.
Robo-advice hasn’t taken over yet
None of the other poll options – robo-advice, video statements, free consolidation services and phone calls to members – broke above 8 per cent as a perceived priority for member engagement.
In spite of the recurrent robo-advice discussions throughout the industry, only 22 per cent of delegates said their fund was ready and willing to implement it as a solution. The majority were either still reviewing options or working on a high-level digital strategy.
The difficulty of getting younger people engaged with super is widely acknowledged as a major obstacle to members reaching adequacy in retirement.
This is a critical obstacle for the industry to overcome if the compulsory retirement savings system is to achieve its purpose.
A home-owning couple would now need $640,000 in superannuation savings at retirement to have a comfortable standard of living, the Association of Superannuation Funds of Australia states. Yet Challenger estimates that the median pre-retiree super balance for a household is just $184,189.
