Auto-consolidation of member accounts could drive changes in how superannuation administrators are remunerated and lead to a more incentive-based approach, according to industry executives at the Australian Institute of Superannuation Trustees administration symposium.
IQ Group principal consultant Elizabeth Maclean said an incentivised approach by super funds would encourage administrators to do a whole raft of things to increase the chances of reactivating members and retaining them as members of a particular super fund.
Administrators already face high costs and profit margins for them were low, making competition for member administration more difficult, Maclean said.
That may drive changes to their remuneration model and make it more incentive-based, she said.
Super funds and administrators should be stumping up cash and working together to make members want to stay in the fund, by driving up opt-outs of auto-consolidation and getting consent to the use of tax file numbers, Maclean said.
Funds and administrators were stuck in mutually onerous contracts and they should be re-thinking the arrangements and making them fair for both sides, she said.
Vision Super general manager of business operations Peter Rowe agreed that super funds need to explore rewarding administrators for adding value to the fund.
"It's time to look at contracts and think how they want to remunerate administrators and how they want to get remunerated," he said.
