Superannuation funds to shed members under Stronger Super
Superannuation funds are largely unprepared for the onset of the Stronger Super regime, which could see some funds lose over 10 per cent of their members, according to an Association of Superannuation Funds of Australia report.
The lack of preparedness is leading to employers being "inundated" with information from fund and financial adviser contacts, according to the report.
The Association of Superannuation Funds of Australia conducted a survey of 34 industry executives in conjunction with Ernst & Young as part of its Stronger Super Preparedness CEO Report.
Thirty per cent of the executives surveyed expect to lose more than 10 per cent of their members under the automatic account consolidation phase of Stronger Super.
The report found that 38 per cent of executives surveyed planned to take advantage of the Stronger Super reforms, while 26 per cent are simply taking a 'compliance' approach to the legislation.
The executives surveyed were also asked which element of the legislation would incur the highest cost. Thirty-seven per cent pointed to MySuper; a further 37 per cent named the back-office SuperStream accounting; governance accounted for 19 per cent; and 7 per cent of respondents pointed to self-managed superannuation fund administration costs.
The biggest internal cost to superannuation funds was expected to be technology and infrastructure changes, at 35 per cent. A further 26 per cent of executives believed businesses processes and people changes would constitute the highest cost for funds.
The report urged executives to put up with the short-term pain and "embrace the changing landscape of superannuation".
"Delaying action is a false economy, which will damage relationships with stakeholders and members," said the report.
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