Super funds failing to communicate mergers to members

While superannuation funds are being active with mergers, KPMG has found only those members which are highly engaged are aware that anything has changed.

KPMG’s ‘Superannuation transformation and consolidation’ report found there had been 15 major mergers during 2020/21 and the average size of the receiving fund had risen from $32 billion in 2017-2019 to $76 billion in 2020/21.

However, super funds needed to improve their communication with members as only the most engaged members knew there had been a change.

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The firm spoke to over 500 people, more than half of which were members of a merged fund, but only one in five of those were aware their fund had merged.

“Awareness of merger activity remains low, with only one in five members of ‘merged funds’ aware that a transaction has taken place,” it said.

“This group typically represents the most engaged and active superannuation fund members.”

Members that were classed as ‘transaction aware’ were characterised as being highly-engaged, in frequent communication with their fund and with a good awareness of the products and offerings available. They also reported the highest satisfaction levels with their fund.

Half of those members who were ‘transaction aware’ said they had at least monthly communication with their super fund while those members who were unaware were most likely to receive information on a quarterly basis or even less frequently.

“There is a strong and proven link between regular, effective engagement with members and transaction awareness,” the report said.

“Funds need to continue to build engagement across the entirety of their membership to build awareness of transactions and the potential impacts to their members.”

Sentiment towards merger activity was ‘neutral’ among unaware members, reflecting their disengagement, and was ‘positive’ by transaction aware members.

While transaction aware members were highly satisfied and saw the benefits of a merger, overall perception of mergers “remains limited” across members. Benefits included lower fees, more online information, marked improvement in value and better yields.

“This demonstrates a clear gap between the realisation of member benefits as part of a transaction business case and members’ perception of these product/service improvements,” the report said.

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