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Superannuation engagement is in the eye of the beholder
The definition of an 'engaged' superannuation member should differ for each fund, depending on its overall objectives, according to eo Financial Services.
The Super System Review panel defined an 'engaged member' as someone who makes an investment choice - that is, a member who is outside the fund's default option.
But eo Financial Services general manager for marketing Dzu Huynh argues that just because a member is in the default option doesn't mean they aren't engaged.
"Rather than defining members by this one action, each fund needs to set its own parameters of what engagement looks like, based on the member profile and [the fund's] broader business objectives," said Huynh.
For example, one fund may choose to define an engaged member as someone who chooses to consolidate their super, said Huynh - while for another fund, someone who is salary sacrificing into their super may be defined as engaged.
For some funds, it may simply be enough that a member keeps their contact details up-to-date, he said.
Most importantly, funds need to be realistic about their engagement goals, with the aim being "to get members to do just one more thing - not seven", said Huynh.
"It's difficult for members to jump from being completely disengaged to making high-level choices such as getting financial advice or completing binding death benefit nominations," said Huynh.
In the MySuper environment, when funds' resources will be scarce, it will be crucial to segment members and target the "high value" members who are most open to responding to engagement drives, he added.
"This will also ensure that the members being targeted are those most likely to help the fund achieve its objectives and members receive what they expect," said Huynh.
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