Super funds must start making changes now before Stronger Super legislation is implemented or risk being caught short, according to new research by Mercer.
A new paper called Stronger Super: What will it mean for superannuation funds and members argues that despite not knowing precise legislation, funds should start planning how they intend to operate under the new regime.
This planning should include thinking about strategic, operational and member engagement issues, said David Anderson, Mercer’s managing director and market leader for Australia and New Zealand
“From a strategy perspective, funds and providers should be asking what the gaps are between where they are now and where they’ll need to be post Stronger Super,” said Anderson.
Questions funds should also be asking include how can they differentiate themselves under MySuper and how can they demonstrate a fair and reasonable allocation of costs between MySuper and other products.
In terms of operational issues, funds should think about how and when to apply for approval from the Australian Prudential and Regulation Authority, through to managing auto-consolidation and reviewing and transitioning insurance arrangements, Anderson said.
Member engagement will also be critical and funds should be considering how to retain existing members and attract new members, and how this will be the same or change with MySuper, he said.
“We’re seeing many funds and providers keen to start the planning process … There are definite steps they can take now which will benefit the fund regardless of the final [legislative] outcome,” Anderson said.
