One in five to switch says MLC

One in five people in an employer-sponsored superannuation fund will change their fund post-July 1, according to new research, but most won’t switch immediately and still haven’t decided where they will go.

The study conducted by AC Nielsen for MLC with 1,065 employees and 341 employers across Australia, also found that 61 per cent of employees would conduct their own research or consult a financial planner or accountant before moving any of their money.

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The results of the survey find the middle ground between the results of two other large surveys conducted in November last year, one a qualitative research project conducted for the Association of Superannuation Funds of Australia, which showed that only one in 10 intended to switch in the choice environment, and another AC Nielsen survey which found a massive one in three intended changing funds.

As was the case in the past two surveys, performance and cost were found by MLC to be the main motivators for swapping super funds, above investment options, available insurance cover, reputation and history in the market.

Employers expressed fear of the administrative burden that could be imposed by choice, with 56 per cent claiming that they would use additional benefits like pooled insurance cover and fee subsidies to try to convince employees to stay in their current employer sponsored fund and 59 per cent saying they would provide employees with education about choice.

“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,” said MLC head of platform services Paul Maddock.

MLC and subsidiary Plum Financial Services also announced last Friday that they had teamed up with payroll company ADP Employer Services to offer employees a clearing house solution.

MLC will cover the cost of the system for employers but only if they use MLC MasterKey Business Superannuation or Plum Superannuation as their default fund.