MLC research reveals 1 in 5 employees plan to switch under Fund Choice - 6 May 2005
Friday, 6 May 2005
SYDNEY: Research conducted by MLC found that almost 1 in 5 employees with an employer sponsored fund planned to switch funds in a Fund Choice environment.*
The research, which was conducted with 1064 employees and 341 employers across Australia, also revealed that the majority of employees who intended to switch had no intention to switch immediately and had not decided where they would move to.
Head of MLC Platform Services, Mr Paul Maddock, said the most important point for employees to realise is that they do not have to make a change to their superannuation provider and if they do want to make a change, there is no time limit on them to do so.
“There will be a lot of noise about choosing a super fund when Choice is introduced on 1 July, and it will be important for employees to take their time when evaluating different funds,” Mr Maddock said.
“If employees don’t understand how their fund compares with others, they should seek professional advice from a qualified financial adviser to talk about their existing fund, its features, costs and benefits and the equivalent components of the fund they are considering moving to.
The research revealed that 61% of employees surveyed said they would conduct their own research or consult the services of a financial adviser or accountant.
Employers also feel they have a role to play, with 59% of employers surveyed planning to provide education and support to help employees make an informed decision about their superannuation fund.
Employees said that performance and cost were the main reasons they would consider switching funds.
While performance and fees are important considerations, Mr Maddock said they are only one part of what employees should look at when comparing funds. They also need to consider:
• a fund’s investment options
• available insurance cover and whether the fund has automatic acceptance levels
• reputation and history in the market
• the fund’s features and services including whether or not the fund accepts spouse contributions, has daily unit pricing, offers online access to accounts, timely and accurate statements and call centre services that are open when you need them.
“One of the ways employers can reduce the administrative burden of super choice is to actively communicate the features of their default super fund to ensure employees understand what they currently receive before considering moving to an alternative fund,” Mr Maddock said.
“MLC’s research found that 56% of employers felt that additional benefits could be used as an incentive for employees to remain with their current employer sponsored fund.
“The reality is that many employees will not need to change superannuation providers as many are already members of employer sponsored funds that provide a range of investment and insurance options, asset classes and investment managers.
“We are hoping that super choice will be a catalyst for members in these types of funds to take a greater interest in their superannuation and seek advice on how to maximise their retirement savings.
*ACNielsen Research – Impact of Superannuation choice legislation, January 2005
Further information:
Stacey Mitchell
Corporate Affairs Manager
MLC
02 9966 3035
0400 305 446
Who is MLC
MLC is the wealth management division of the National Australia Bank. It is comprised of a group of companies, all of which are subsidiaries of the National Australia Bank. MLC provides funds, platforms and services that support the provision of quality financial advice and help people realise and protect their lifestyle goals. Through a vast network of financial advisers, MLC provides quality financial planning services, wealth creation (investments, private banking), wealth protection (insurance) and superannuation solutions to individual investors and corporate customers. MLC also provides corporate and institutional customers with out-sourced investment, superannuation and employee benefit solutions. MLC manages more than $78 billion on behalf of individual investors and corporate customers in Australia (as at Dec 2004).
* The information contained in this media release is for media advice purposes only. The contents are true and correct at time of publishing/issuing, however may change over time. For further information about NAB products or rates, please go to Interest Rates, Fees & Charges
