Industry funds still lag the broader superannuation sector significantly on retirement – as expressed through member satisfaction scores – according to CoreData’s new Best Possible Retirement report, produced in partnership with Conexus Financial, publisher of Investment Magazine.

The annual study, released on Monday, concluded that member service, rather than lower fees or better returns, can be “key differentiator” for retirement outcomes.

By sector, retail funds had the highest overall score on the best possible retirement index – which incorporates elements of confidence and comfort, financial discipline and retirement experience – at 56.9. Public sector funds follow at 55.6, while industry funds lagged significantly at 48.9. Some industry fund figures canvassed said the results reflect the administrative hangover of multiple mergers and integrations, which are holding some funds back in terms of their systems, products and communications.

But CoreData global chief executive Andrew Inwood said they are also another sign the system is simply geared towards accumulation.

“It’s really, really complicated; industry funds have been world-leading at setting up this system and world-leading at managing people in accumulation,” Inwood told Investment Magazine. “But they seem to have come late to the idea that there is going to be a retirement wave.

“It’s an unbelievably well-designed system for accumulation… but the complex part of it is managing that person through the retirement, and meeting the implicit promise of the fund – that it will be making the transition with you.

Meanwhile, Super Members Council (SMC) says that mandatory standards for superannuation funds will “further uplift” member services after a year where funds were forced to make major investments to improve service in the wake of multiple high profile court cases and lashings from the regulators.

Back in January, the government said that it would introduce mandatory service standards with an initial focus on “critical areas” like timely and compassionate handling of death benefits, fair and efficient processing of insurance claims, and clear, respectful and accessible communications with members. The creation of the mandatory standards was partly in response to significant delays in claims processing at Cbus. ASIC later sued AustralianSuper for similar delays.

In a submission to Treasury, the SMC says those standards should be fast-tracked so that funds will have a “clear north star” as they invest in service delivery for members.

“Millions of everyday Australians interact with their super funds each year, and they rightly expect the highest standards of service, communication and care when they do,” said SMC deputy CEO Georgia Brumby.

“Profit-to-member super funds have made major investments to improve services and reduce complaints with a laser-like focus. Mandatory service standards and common-sense regulatory reforms, can build on this work and ensure Australians’ service from their super fund is faster and clearer.”

While the government has not commented publicly on its plan for mandatory standards since the election, well-placed Canberra sources say that it intends to push ahead with the reforms and that they are reasonably high on Treasury’s agenda.

The SMC’S priority areas include simple and faster claims handling – including through the digitisation of binding death nominations and the standardisation of death certificates and proof of identity – and better service of First Nations members through the recognition of kinship relations (where the relevant beneficiary of a death claim may not be a direct or even indirect blood relation).

“Getting rid of outdated requirements like hard copy forms and wet signatures and ensuring consistent state and national approaches for ID and death certificates would materially reduce time consuming processes for members and funds alike,” Brumby said.

The SMC also wants the standards underpinned by principles including: putting “members at the centre”, being “clear, simple and actionable”, measurable, comparable, able to be communicated clearly, and allowing for individual fund innovation and responsiveness to “lift the bar even higher”.

But Inwood questioned whether mandatory service standards would help uplift member service, saying that funds might tend to towards mediocrity as a result.

“There’s all sorts of standards, and standards have a tendency to homogenise people towards the bottom rather than the top – they deliver against the standard rather than the desire to be really good in this space.”

The CoreData research found UniSuper was the fund with the most satisfied members, followed by Commonwealth Superannuation Corporation and AMP.

“The reality is that UniSuper is very good at articulating the message of what they’re doing and why they’re doing it,” Inwood said.

“They’ve become great communicators; you should constantly be aware of the fast movers in that space. AMP is another one; they’re doing really well. Aware and Australian Retirement Trust are coming up to speed despite the headaches they’ve had in the past. The reality is that it’s the ability to communicate clearly about what’s going on.

“The temptation in the research is to say that UniSuper members are richer and therefore more satisfied with their outcomes, but that’s not true; as you move up the scale of wealth, you start to ask more questions and have many more choices.”

“It’s really, really complicated; industry funds have been world-leading at setting up this system and world-leading at managing people in accumulation. But they seem to have come late to the idea that there is going to be a retirement wave.

“It’s an unbelievably well-designed system for accumulation… but the complex part of it is managing that person through the retirement, and meeting the implicit promise of the fund – that it will be making the transition with you. That’s where we’re still struggling as an entire industry.”

Member service standards will be in focus at the Investment Magazine Insurance in Super Summit in Sydney on 22 July.