Super funds need to invest in advice structures, engagement, and solid member servicing if they are to retain members but many are struggling to have clear strategies.
That is the finding from SuperRatings, whose data found superannuation membership dived by 1.4 per cent on a "whole of fund basis" mainly due to lost member account transfer to the Australian Taxation Office (ATO) and account merging between funds.
SuperRatings CEO Adam Gee said he is sure that funds that invest in advice strategies, member segmentation and communication methods have better pension membership and funds under management utilisation.
"Funds that have yet to invest need to consider their membership base and how they are educating their members in relation to retirement solutions in advance of members retiring," he said.
"If they do not do this, they risk losing large balances to other funds, despite it not being in the member's best interest in some cases."
In contrast, when the data focused on the pension membership category across the sector, it found it grew by 16.8 per cent.
While whole of fund net assets grew by 16 per cent due to solid investment returns over 2013, pension phase funds under management still easily overshadowed this, recording a 26 per cent growth.
With the median account balance for pension members being four times the whole of fund median, executive manager of consulting Wendy Tse said there is a need for more investment in pension products.
Using a pension utilisation rate to see who is entitled to an account based pension versus those that have actually started a pension product, SuperRatings found members over 60 made up just half of FUM for the median retail master trust, while net assets actually in pension products made up just a quarter of total FUM, which is a utilisation rate of 49.6 per cent.
On the other hand members aged over 60 made up just 21.8 per cent of the median not for profit FUM, with net assets in pension products making up just 6.2 per cent of total fund assets.
This is an utilisation rate of just 28.4 per cent.
