Super Nation is a fortnightly column that examines, explains and analyses key issues in one of Australia's largest, fastest-growing and most important industries: superannuation.
Australia has more than 27 million people, 18 million of whom have superannuation accounts with an average of $170,000 in them.
Although that may seem like a lot of money, 27% of these Australians do not know who their super fund is or have ever interacted with the fund.
This disturbing is from research by AMP, which found almost half of Australians checked in with the fund once or twice a year.
It may help to explain why the measurement of how confident Australians are about their financial readiness for retirement is just 50 out of 100, the financial services giant said.
Superannuation is, after all, the major income stream for Australian workers after they leave paid employment, along with the age pension and any savings they may have.
AMP Super’s Director of Growth and Customer Solutions Julie Slapp said too many Australians were not aware of the significant help that could transform their quality of life in retirement.
“Small steps – like checking your fund details or talking to your provider – can build confidence and unlock the full benefits of compounding returns,” Slapp said in a media release.
Contributing an extra $20 a week into super could add about $98,000 to the balance over 30 years through compounding but more than half of people under 40 did not understand the concept.
“We also strongly encourage Australians to take full advantage of intra-fund and digital financial advice, often provided at no extra cost by super funds – the guidance can be transformational,” Slapp said.
But why does this apparent apathy matter?
After all, the team investing the money have no idea whether the members know their fund, their balance, the investment options or any other element of their super.
They do their jobs to the best of their abilities to generate strong returns.
Acting on advice
According to AMP, other funds and industry bodies, the answer lies in the benefits of receiving financial advice, which in turns helps in ensuring the fund is appropriate to their circumstances, making investment decisions, reviewing insurance arrangements and fees, and passing knowledge onto children and others.
“Superannuation should not be treated as a “set and forget” arrangement,” said Chaneg Torres, Executive Director of Policy of the Financial Service Council (FSC), which represents super funds, fund managers, life insurers and financial planners.
He said active engagement was essential to achieving good retirement outcomes and could involve actively making decisions about how their money is invested, regularly reviewing fees and insurance arrangements and ensuring the fund remained appropriate to an individual’s evolving circumstances.
Torres believed the funds also had a responsibility to provide members with a comprehensive suite of advice and guidance options ranging from basic information to digital tools and calculators and intra-fund advice.
Intra-fund advice is simple financial advice provided by super funds at no extra cost to their members but which is only about their accounts and does not cover their overall financial situation or other funds or investments.
The cost is apportioned across the membership base.
“Where a member’s financial situation is more complex, funds should refer members to personal financial advice that considers an individual’s broader financial circumstances,” Torres told Azzet.
Increased engagement could be as simple as checking fund performance, confirming the right investment option based on age and risk profile, making salary-sacrifice or spouse contributions, and using the fund’s advice tools, according to AMP.
“A few small actions taken early can significantly boost long-term outcomes,” an AMP spokesman said.
The AMP spokesman said intra-fund advice could help members make more informed decisions such as choosing the right investment option, ensuring appropriate insurance cover or deciding whether to make additional contributions.
Starting early
Super Members Council (SMC) CEO Misha Schubert said many Australians did not pay much attention to their super, especially when they were younger.
She said when people engaged more with their super they were more likely to take actions that give them more money when they retire.
“Taking some very simple steps— consolidating your super accounts, checking for unpaid super, or choosing an investment option that best suits your goals— could lead to having as much as tens of thousands of dollars more in your super by retirement,” Schubert said.
“Ultimately, engagement is not just about individual actions—it’s also about ensuring the whole super system is easy to understand, accessible, and designed to support Australians at every stage of their lives.”
The SMC, which represents and advocates on behalf of the giant industry funds along with other profit-to-member corporate and public sector funds, has been advocating for the Government to expand access to simple, affordable financial advice and digital tools.
In June the FSC released research by NMG Consulting, Empowered for Retirement: A Best Practice Framework for Superannuation Funds which illustrated the importance of engaging superannuation customers from the beginning of their journey with superannuation through to retirement.
To achieve the right retirement solution, members must be engaged throughout their life to maximise savings and confidently make decisions, according to the report.
‘Good’ engagement includes proactive initial engagement and ongoing ‘nudges’, or prompts, aligned to changes in behaviour and life stage into retirement.
AMP also recommended discussing super with family members to share knowledge.
