Tuning in to super. An inaugural biennial study and index to track Australia s engagement with super

Transcription

1 Tuning in to super An inaugural biennial study and index to track Australia s engagement with super FULL REPORT / 211

2 Welcome to the inaugural Tuning in to super report For most Australians, the superannuation they accumulate throughout their working life will be the key to their retirement future. As we live longer and our time in retirement grows, the need to focus on accumulating retirement savings earlier in life increases. And the extent to which Australians are engaged in their superannuation is a critical pre-curser to retirement readiness. Despite its importance, we know super is a low involvement product for many. That s why policymakers and the super industry spend considerable resources in an effort to tune Australians in to the need to think about their retirement future early on in their working lives. To date, there has been no reliable way to measure member engagement and the success of these efforts. Recognising this gap, the Australian Institute of Superannuation ees (AIST) has partnered with Russell Investments and commissioned newfocus to develop Australia s first super engagement index. Based on a national study of 1,32 Australians, this index measures engagement across eight variables, while the supporting research explores drivers and barriers to engagement, and awareness of and attitudes towards super. To be published every two, the index and supporting research will provide the industry and policymakers with valuable insights into current attitudes and behaviours regarding one of the most important financial decisions of our lives. Furthermore, this research and the index are markers that help give the super industry and policymakers a benchmark to assess changes for the future. So what does the inaugural report reveal? It shows how the index is constituted as well as how it varies across different member segments based on age, income, gender and super situation. The underlying findings show a number of positive steps in the right direction. Most Australians have the right attitude towards super with 85% saying super is important to their retirement, and six in ten Australians perceiving super to be important to them now. Three quarters of Australians have checked their balance in the past year and, on average, each has performed 2.9 activities involving super savings over the last 12 months. But there continues to be some cause for concern. Half say they are running out of time to build a retirement nest egg. One in three do not know the amount employers contribute to super on their behalf and many are still unaware that super comes with built-in protection through insurance. Plus many still aren t consolidating funds and most don t take advantage of educational services available. There s more work to do to engage more Australians in their retirement future. As an industry we need to continue to simplify and improve our member communications, education and services. And if the proposed Superannuation Guarantee (SG) increase passes Parliament we must capture that opportunity to engage members in their growing retirement income pool. AIST and Russell Investments look forward to supporting the industry in this pursuit and hope to report improving engagement in the 213 index results. Fiona Reynolds Chief Executive Officer, Australian Institute of Superannuation ees Geoff Peck Managing Director, Corporate Superannuation Russell Investments

3 Table of contents Background 2 Aims 3 Methodology and Sample 4 Methodology 4 Sample 4 Key Findings 7 Fund membership 7 Awareness of super fund offerings and proposed Government changes 8 Type and volume of activities and interactions 9 Communication mediums used for fund engagement 1 Attitudes towards superannuation 11 Differences between attitudes and behaviour 13 Triggers that result in super-related involvement and activities 14 Barriers to superannuation engagement 15 Key segment differences 15 Engagement at different life stages 2 Results 23 How results are reported 23 Fund membership 23 Awareness of super fund offerings and proposed Government changes 3 Type and volume of activities and interactions 34 Communication mediums used for fund engagement 37 Attitudes towards superannuation and other personal finance factors 38 Differences between attitudes and behaviour 42 Triggers that result in super-related involvement and activities 45 Barriers to superannuation engagement 48 Key segment differences 49 Demographics 55 Appendix 1: Main Fund by Fund Type 58

4 Background Superannuation is a low involvement product for many consumers and getting people interested in their superannuation is a continuing challenge for most funds. While it is widely accepted that engagement levels among members are generally low across the industry, there is no reliable way to measure member engagement at this point. There is a need to investigate members behaviour and attitudes towards their fund as a reliable and in-depth understanding of member engagement is critical to the industry moving forward. Russell Investments and AIST have therefore partnered in a joint initiative to launch a new index for the industry to measure the level of engagement members have with their superannuation. In order to establish the index, Russell Investments & AIST needed to research and capture the attitudes and behaviours of superannuation fund members nationally. This research was designed to measure the level of engagement members have with their superannuation. Russell Investments Founded in 1936, Russell Investments delivers financial services, products and advice to institutional investors, financial professionals and individuals in more than 4 countries. Russell Investments mission is to improve the financial security of people and develop innovative solutions to meet the changing needs of all investors. Russell provides services to some of the largest corporate superannuation funds in the country, with total assets under management in Australia of more than AUD53 billion and 22, members under administration. Australian Institute of Superannuation ees (AIST) AIST is a national not-for-profit organisation whose mission is to promote and protect the interests of Australia s $45 billion notfor-profit superannuation sector. AIST s membership includes the trustee directors and staff of industry, corporate and publicsector funds, who manage the superannuation accounts of nearly two-thirds of the Australian workforce. As the principal advocate and peak representative body for the not-for-profit superannuation sector, AIST plays a key role in policy development and is a leading provider of research. 2

5 Aims Aims The overarching aim of this national study is to launch an index for the superannuation industry to measure the level of engagement members have with their superannuation. Specifically, this includes: measuring the type and volume of activities and interactions performed by members identifying behaviour in terms of communication methods members use for contacting their superannuation fund understanding members attitudes to superannuation, i.e. the importance of super now and in retirement, also compared to the importance of other personal finance factors determining the level of awareness and knowledge (both at a broad level, i.e. recall of fund that contributions are being paid into, as well as specific awareness, i.e. ability to make an investment choice) gaining an insight to the triggers that result in subsequent action from members investigating the barriers to superannuation engagement identifying potential gaps between member attitudes and behaviour determining key differences between segments (age, gender, location, life stage, etc) building a matrix of what member engagement looks like at different life stages This research also aims to index results in order to measure changes over time and identify trends, particularly within segments. The research instruments used to respond to these aims are available upon request. 3

6 Methodology and Sample Methodology To allow statistically valid and robust conclusions to be drawn from this research, a quantitative stage was employed incorporating a mixed-modal approach. The methodology comprised telephone (CATI) interviews and online interviews. The online fieldwork was conducted between 17 December and 1 January, and the CATI fieldwork was conducted between 17 December and 2 January. The online survey length averaged 12 minutes, whilst the CATI survey averaged ten minutes. Sample The sample for this national research included respondents who had at least one super fund and were not retired. This provided a view of engagement with super fund members who had one or more super funds and were still accumulating funds. The table below outlines the final sample achieved: Table 1 Methodology Online sample CATI sample Total sample Mixed modal (CATI & online) 1,2 3 1,32 The following table outlines the statistical accuracy levels of the data obtained, relative to the population: Table 2 Segment Location Methodology Sample Accuracy at one point in time (at 95% confidence level) Accuracy over time (at 95% confidence level) Australian population with an active superannuation account (excluding retirees) National Mixed modal (CATI & online) 1,32 ±2.7% ±3.9% Accuracy at one point in time refers to the accuracy of results should you take a sample of the population now compared to if you had results for every single member of the population. Calculation of the level of accuracy is based on the size of the population that your sample is drawn from. The level of accuracy increases as the size of the sample approaches the size of the population. For example, if the level of accuracy at one point in time is quoted at ±2.7%, this means that the measurement of items in the member engagement research accurately represents the measurement of these same items in the population, within a range of ±2.7%. The calculation of accuracy over time is based on the sample size taken at each point in time. This accuracy level tells the percentage difference between the samples at each point in time that is required, before a statistically significant difference will be found, with the sample size obtained. For example, if you have a tracking survey where the sample at each point in time is 1,32 and you are quoted an accuracy over time of ±3.9%, this means that there must be a difference of 3.9% between the results achieved in each survey of 1,32 respondents for a statistically significant difference at the.5 level to be found. The research was carried out in compliance with International Standard AS ISO

7 Methodology and Sample Weighting To ensure a nationally representative sample of respondents with a super account in the accumulation phase the data has been weighted by gender, age and location as per the ABS, and is outlined below: Table 3 State Unweighted Weighted Sample Percentage Sample Percentage NSW VIC QLD WA SA TAS ACT NT Total 1,32 1% 1,32 1% Gender Unweighted Weighted Sample Percentage Sample Percentage Male Female Total 1,32 1% 1,32 1% Age Unweighted Weighted Sample Percentage Sample Percentage Over Total 1,32 1% 1,32 1% Sourced from the ABS; Employment Arrangements, Retirement and Superannuation, Australia, Apr to Jul 27 and Australian Demographic Statistics, Jun 21. 5

8 Methodology differences The differences between the CATI sample and online sample were compared in order to identify any significant differences. The CATI sample included a higher proportion of older respondents compared to the online sample, in particular those aged 56 to 65 (22% compared to 16%). The statistically significant differences found were consistent with the differences by age outlined throughout the report, for example older respondents were, in general, more aware of what was available to them, performed more activities and were more confident with their super situation. The other key difference between the methodologies was the use of online mediums to perform activities. Online respondents were overall more likely than CATI respondents to have performed activities online or via a website. Benchmark data Market research company, newfocus, has many available benchmarks, collated over a number of, which enable results to be assessed against competitors and best practice organisations across and within many industries. The benchmark data shown in this report has been extracted and mined from previous studies conducted in the superannuation industry and illustrates benchmark results for the questions listed below, to enable a contextual comparison with others: How would you best describe your super situation from the following? Would you say... you are just starting out you have a low balance but feel you have enough time to build it up you have a low balance and feel you may be running out of time to build it up you have a good account balance and are comfortable with how you are going If you change jobs in the future, how likely are you to change super funds? Are you... certain to change funds very likely to change funds quite likely to change funds neither likely nor unlikely to change quite unlikely to change funds very unlikely to change funds certain not to change funds 6

9 Key Findings Key Findings Fund membership Not-for-profit funds were most frequently mentioned as respondents main fund Fifty-nine percent of respondents mentioned a not-for-profit fund as their main fund, followed by a retail master trust (28%). It is interesting to note that 4% of respondents mentioned they have a self managed fund (SMSF) which they consider to be their main fund. The use of SMSFs is an area which has been experiencing steady market growth over the past five or so. The table below outlines the different fund types after recoding respondents main fund: Table 4 Fund Type % response (n=1,319) N/A 8 8% cannot recall the name of their main fund Eight percent of respondents mentioned don t know when asked the name of their main fund. A further 16% of respondents, who indicated they had more than one fund, were unable to recall their other funds. Respondents who were just starting out or had a low fund balance were less likely to recall the name of their main fund. Low income earners were most disadvantaged as a result of erosion of investment in multiple funds The majority belonged to one main super fund (68%), with a further 23% having two funds. Seven percent of respondents had three funds, and a further 3% had four or more funds. Respondents who were currently unemployed, a student or performing home duties were more likely than others to have four funds or more. They were also more likely to have a lower income and fund balance than other respondents of the same life stage. SMSF 4 Corporate 2 The table below outlines multiple funds membership and shows a comparison by employment status: Table 5 % response Full time (38 to 4 hours per week) (n=767) Part time (approx 18 to 24 hours per week) (n=24) Selfemployed (n=66) Casual (n=89) Student (n=43) Unemployed (n=87) Home duties (n=64) 1 super fund super funds super funds super funds super funds More than 5 super funds Note: % represents n=3 7

10 Awareness of super fund offerings and proposed Government changes Seven in ten respondents were aware they were able to salary sacrifice into super Overall, higher awareness was noted among males and older respondents (over 46 of age). The greatest awareness levels were found for the ability to salary sacrifice into super, with 72% aware that this feature was offered through their super fund. Higher levels of awareness were also seen for the following: the ability to change investment choice (67%) the ability to make contributions electronically (6%) It is interesting to note that, although 67% of respondents were aware they had the ability to change investment choice, only 14% actively changed their investment choice/ switched their investment type in the past 12 months. Overall, the awareness was at reasonable levels averaging over 5%. Lower awareness was noted for the following: the ability to attend an education seminar (42%) that insurance is automatically included (53%) that calculators are available on the fund website (54%) the ability to top up insurance (55%) More than 5% of respondents mentioned they were aware the following were not offered by their fund: that insurance is automatically included and the ability to top up your insurance. The fund types of these respondents varied, with a mix of retail master trust funds and industry super funds. The chart below shows the total awareness levels: Chart 1: Total awareness levels 8

11 Key Findings Statistically more respondents were aware of the Government Co-contribution Scheme than the percentage contribution paid by their employer Seventy-seven percent of respondents were aware of the Government Co-contribution Scheme, a significantly higher number than those aware of the percentage contribution paid by their employer. Thirty-one percent of respondents were unaware of the percentage contribution paid by their employer. Compared to other respondents, females and those under the age of 46 were statistically more likely to have low awareness than other segments. Only 29% of respondents were aware that the Superannuation Guarantee (SG) rate would be increased to 12% by Half of the respondents were aware that the Government was proposing to increase the SG rate and one third were able to correctly recall that the SG rate would increase to 12%. Of those who were aware of the Government s proposed increase, 62% were able to correctly identify the proposed amount to be 12%. Higher statistical analysis found that females were far less likely to be aware of the increase compared to males. Other proposed amounts, thought to be correct by respondents in the study, in order of most frequently mentioned included 15%, 11%, 1% and 13%. Type and volume of activities and interactions On average, respondents had performed 3.5 activities in the past 12 months The average number of activities performed by respondents was 3.5 (out of the 12 activities tested with the market). The activities; checked superannuation fund balance and reviewed member statement, were not mutually exclusive as respondents could check their balance by reviewing their statement. Additional analysis was conducted to control for this variable resulting in an average number of activities performed by respondents of 2.9. Nine percent of respondents performed none of the activities and a small proportion of respondents were very active and engaged with their super fund as they performed ten or more over the last 12 months. The most common number of activities performed was three (19%), followed by four activities (16%). As engagement occurs across a broad spectrum of activities, we have outlined in the table below the number of activities performed and the percentage who have performed each of them: Table 6 Number of activities % who performed this number of activities (n=1,319) Note: % represents n=1 9

12 Three quarters of respondents had checked their superannuation account balance within the last 12 months The activity most frequently performed was checked superannuation fund balance, performed by 74% of respondents. This was followed by reviewed member statement and read super fund newsletter/magazine, 66% and 5% respectively. Attended an education seminar and applied for additional insurance were performed by less than 1% of respondents. The following table outlines the activities performed in the last 12 months and the proportion of respondents who performed each activity, and shows a comparison of the activities performed once or more than once: Table 7 Activity % response % once % more than once Checked superannuation fund balance Reviewed member statement 66 / / Read super fund newsletter/magazine 5 / / Updated address/contact details Made additional contributions/payments into super Consulted a financial planner/advisor about super 19 / / Provided or updated beneficiaries Actively changed investment choice/switched investment type Consolidated funds Actively selected a different super fund from the default fund 1 / / Attended an education seminar 9 / / Applied for additional insurance Communication mediums used for fund engagement Online and hard copy/mail/form were the most frequently used communication mediums The most common communication methods included online/website and paper hard copy/mail/ form. Not surprisingly, the employer was the lowest channel except for when making additional contributions and payments into super accounts, as most activities can not be performed through employers. The table below outlines the most frequently used communication medium for each activity: Table 8 Task Checked superannuation fund balance Updated address/contact details Made additional contributions/payments into super Provided or updated beneficiaries Actively changed investment choice/switched investment type Consolidated funds Applied for additional insurance Most frequently used communication medium Paper hard copy/mail/form Online/website Through your employer Online/website & paper hard copy/mail/form Online/website Paper hard copy/mail/form Paper hard copy/mail/form 1

13 Key Findings Attitudes towards superannuation 85% indicated super is important to their retirement A large number of respondents perceived super to be important to their retirement, however, interestingly, 5% did not. The results were relatively consistent across the age groups however differences were highlighted when analysing respondents super fund balances. Respondents with a higher balance (above $21,) were statistically more likely to suggest super was of high importance to their retirement, compared to those with lower account balances, as expected. Six in ten respondents perceive super to be important to them now Respondents who perceived super was important to them now were more likely to be older and approaching retirement. This supports other research conducted which clearly shows super to increase in its importance levels as members get closer to their retirement and start thinking about their financial wellbeing. Overcoming this perception via communication to members is a challenge to many super funds and is important as members often leave it too late; half of the respondents in each of the age groups 46 55, 56 65, and over 75, felt they had a low balance and may be running out of time to build it up. Table 9 Only 36% of respondents were confident they were on track to financially achieve the retirement they would like Only one third felt that they were on track to financially achieve the retirement they desired, furthermore 31% of respondents were not confident that they were on track. It is important to overcome barriers (outlined below in more detail), such as simplifying processes, providing it in layman s terms and making this information easily accessible to members. Legislation and the proposed Government increase of the Superannuation Guarantee rate should also assist in increasing the accumulation of super for members and hence increase confidence in the market over time. Three in ten respondents feel they have a low balance and may be running out of time to build it up Thirty one percent of respondents perceived their balance to be low and felt they may be running out of time to build it up. Furthermore, 12% felt they were just starting out, 29% felt they had a low balance but enough time to build it up and 28% perceived themselves to have a good account balance and they were comfortable with how they were going. The following table shows respondents situational segmentation and highlights the differences by age: % response You have a low balance and feel you may be running out of time to build it up (n=48) You are just starting out (n=154) You have a low balance but have enough time to build it up (n=383) You have a good account balance and comfortable with how you are going (n=375) Over Low Moderate High

14 The table below shows respondents perceptions of their super situation and shows a comparison by super fund balance: Table 1 You are just starting out (n=118) You have a low balance but have enough time to build it up (n=35) % response You have a low balance and feel you may be running out of time to build it up (n=342) You have a good account balance and comfortable with how you are going (n=36) Under $2, $2,-$6, $61,-$1, $11,-$16, $161,-$2, $21,-$4, $41,-$8, 1 18 $81,-$1 million 4 Over $1 million 1 $1 million-$1.5 million 1 $1.5 million-$2 million Over $2 million Low Low- moderate Moderate-high High The majority of respondents perceive super to be of less importance or of the same importance in comparison to most financials and investments More than half of respondents perceive super to be more important than investing in the share market (outside of super). Other financial alternatives were more likely to be on par or of greater importance to respondents than their super was to them. Over half perceived super to be less important than paying off a mortgage. Statistical differences in relative importance were found between age groups respondents aged between 56 and 65 were more likely to rate super of higher importance than all other financial options tested in the research. Conversely, younger respondents were far less likely to do so. 12

15 Key Findings Chart 1 How Australians rate the importance of super compared to other financial activities Chart 2: How Australians rate the importance of super compared to other financial activities Differences between attitudes and behaviour Four in ten of those who had a good account balance and were comfortable with how they were going made additional contributions Respondents who were confident and comfortable with their super situation were more likely than others to have performed the majority of activities. They were more likely to be older respondents, interact with their fund, keep updated on the performance of their fund and make additional contributions. Respondents who have a low balance and feel they may be running out of time were also found to be older, however they were less engaged and, as a result, were less confident with their fund balance. Table 11 You are just starting out (n=154) You have a low balance but have enough time to build it up (n=383) % yes response You have a low balance and feel you may be running out of time to build it up (n=48) You have a good account balance and comfortable with how you are going (n=375) Checked your superannuation fund balance Reviewed your member statement (showing your balance and investments in the fund) Made additional contributions/payments into your super

16 Performing the following tasks was less likely to be an indicator of the level of confidence in fund balance: updated your address/contact details consolidated your funds (rolled over your super funds into one fund) actively selected a different super fund from the default fund of your employer applied for additional insurance (death, disability or other) via your fund Those who perceived super to be of high importance were more actively involved Eighty-three percent of respondents who perceived super to be important to them now had checked their account balance in the past 12 months. As expected, those that perceived super to be important to them now were more involved with their superannuation, with more of them indicating that they perform a range of activities. The table below outlines a comparison in the level of activity by those who perceive super to be important now, those who perceive super to be important to retirement and the total sample: Table 12 Super is important now (n=768) % yes response Super is important to retirement (n=1,15) Total (n=1,32) Checked your superannuation fund balance Reviewed your member statement (showing your balance and investments in the fund) Read your super fund newsletter/magazine Triggers that result in super-related involvement and activities Two in ten respondents mentioned nothing would encourage them to be more involved in super The most popular response given when respondents were asked what would encourage more interest and involvement in their super was nothing. One in ten respondents were unable to suggest anything and went on to state that they don t know. Others indicated they would be more involved when they were older and approaching retirement, when they had more time available or a larger super account balance. Other ideas suggested to encourage more involvement were: better understanding/user friendly/ options/control available/layman s terms/ simplified paperwork/statements more benefit/improved returns/ performance of super fund investments/ able to see it grow more information/advice/investment performance news/comparisons/risks involved easier access/variety of channels/easy to contact/access information/online changing legislation/more incentive/ tax benefits/government contributions/ remove caps improved/regular communication/ newsletter/monthly /fund manager 14

17 Key Findings Two thirds of respondents have never seen a financial planner regarding super Sixty-five percent of respondents had never seen a financial planner or advisor regarding their super. Older respondents and those approaching retirement were more likely to have consulted a financial planner, whilst younger respondents were statistically less likely to have done so. The table below outlines the proportion in each segment who had consulted a financial planner in the past 12 months: Table 13 % yes response (n=232) (n=281) (n=281) (n=268) (n=219) (n=33) Over 75 (n=7) Consulted a financial planner/advisor about your super Note: Please interpret with caution due to the small sample sizes 3 in some of the age groups. Six in ten respondents suggested they were unlikely to change funds when changing jobs More than half of the respondents in the study indicated that they would be unlikely or certain not to change funds when changing jobs in the future. Older respondents (over 56 ) were more likely to suggest they were certain not to change funds, whereas younger respondents were statistically less likely to suggest this which means they are more at risk of being lost as a member when they change employment in the future. One of the reasons that older respondents were not going to change funds, which was identified from further analysis of their responses to other questions, was that they were more likely to be happy with how everything was set up. Barriers to superannuation engagement Overall, having no need or interest and putting off performing these activities accounted for half of the responses as to why members do not get more involved with their superannuation fund. The most frequently mentioned responses included: had no need/desire to perform these/ other activities (3%) keep putting it off/not had the time/ haven t bothered (19%) not interested in my super/not at this stage of life/boring/not main income earner (11%) everything set up/happy with choices/the way things are with my superannuation (8%) 15

18 Compared to other respondents, those aged 56 to 65 were statistically more likely to suggest the reason as everything set up/ happy with choices/the way things are with my superannuation. Furthermore, younger respondents were more likely not to be interested in their super at this stage of their life whereas those aged 36 to 45 were more likely to say they keep putting it off/not had the time/haven t bothered as the main reasons they had not been more involved with their superannuation. Other barriers to engagement mentioned by respondents included: no particular reason/just haven t thought about it (7%) have not been receiving super payments/ from my employer/not working (4%) I find it too confusing/difficult/don t understand/too much literature/ paperwork (4%) lack of knowledge/not aware this was an option/don t know enough about it (4%) my super balance/contribution is too low/ don t work enough/keep taking fees out (3%) Below are a few verbatim comments provided by respondents which further highlight barriers: just really not aware of what I can do, nothing is simply outlined I have zero interest in superannuation when I am losing money hand over fist and not earning anything lack of time, lack of drive I have not attended a seminar in the last 12 months because we went to one two ago because superannuation is boring and I do not give much thought to it Key segment differences Cluster analysis 1 identified three key segments with different levels of engagement. In general, the characteristics which clustered together were: a higher awareness, performed more activities with their fund, a higher account balance and more comfortable with their super situation. This was in contrast to another cluster: younger respondents, who were less likely to be employed full time, had lower awareness of what was available, were less likely to have seen a financial planner and were less concerned about financing their retirement. The key segments are shown on the following pages. Segmentation analysis Cluster analysis uncovered three distinct groups of respondents with the following characteristics: The Super Disinterested comprising 32.2% of the population Characteristics The Super Disinterested segment were younger than other segments and were less likely to be aged over 45. The Super Disinterested were more likely to be made up of females, part-time employees, those with a lower income and super balance. Their awareness overall was lower, they were less likely to have performed super-related activities and were less confident with their super situation. more than half of The Super Disinterested have a super balance under $2, four in ten have a personal income of $2,1 to $4, (below average) one third of The Super Disinterested are employed part-time more likely than other segments to be characterised by 36 and 45 year olds and less likely than other segments to be characterised by older respondents two thirds of The Super Disinterested are females 16 1 Cluster analysis is the assignment of a set of observations into subsets (called clusters) so that observations in the same cluster are similar in some sense. Clustering is a common technique for statistical data analysis used in many fields.

19 Key Findings Awareness Overall this segment had lower awareness of their superannuation fund and offerings: 8% of The Super Disinterested were not aware of the ability to attend an education seminar 57% were not aware financial planning services were available only six in ten of The Super Disinterested are aware they have the ability to change investment choice 71% were not aware the Government is proposing to increase the SG rate more than half of The Super Disinterested were not aware of the percentage contribution paid into their fund (supporting lack of knowledge) 6% were not aware calculators were available on the fund website two thirds of The Super Disinterested were aware they were able to salary sacrifice super and aware of co-contributions four in ten were aware of the ability to top up insurance Behaviour This segment were less likely to have made additional contributions or checked their fund balance, however were more likely to have updated their address/contact details or consolidated their funds: only two thirds of The Super Disinterested read their super fund newsletter in the past 12 months 8% have never seen a financial advisor/ planner regarding their super, 99% have not consulted a financial planner regarding super in the past 12 months six in ten reviewed their member statement in the past 12 months and 56% checked their fund balance in the past 12 months only 8% had made additional contributions not one of The Super Disinterested had attended an education seminar only 2% of The Super Disinterested actively changed their investment type The Super Disinterested were more likely than other segments to change funds if they changed jobs The Super Disinterested are less likely to have provided or updated beneficiaries 88% updated their address or contact details only 2% of The Super Disinterested actively selected a different super fund than their default fund more likely than other segments to have consolidated/rolled over their funds (consistent with behaviour of younger members) The Super Disinterested were unlikely to start up a self managed fund in the next 12 months Perceptions The Super Disinterested perceived super to be of lower importance and were less confident with their fund balance: The Super Disinterested were less confident they were on track to financially achieve their retirement just under half feel they have a low balance and may be running out of time to build it up The Super Disinterested perceive super to be less important now compared to other segments super is less important to their retirement in comparison to other segments (3.8 out of five) 17

20 The Super Betwixt comprising 37.1% of the population Characteristics The Super Betwixt segment have a higher income and super balance than The Super Disinterested, are slightly older in age: The Super Betwixt have a super balance of $2,1 to $6, one third of The Super Betwixt have a personal income of $6,1 to $8, (before tax) just over half of this segment are females one third of The Super Betwixt are aged 46 to 55 half are employed full time Awareness This segment has higher awareness of what was available in comparison to The Super Disinterested however less awareness in comparison to The Super Controlled: one third were aware that they are able to attend an education seminar nine in ten were aware that financial planning services were available 95% of The Super Betwixt were aware they are able to change investment choice only four in ten were aware the Government is proposing to increase the SG rate three quarters of The Super Betwixt were aware of the percentage contribution paid by their employer 88% were aware of co-contributions seven in ten were aware calculators were available on the fund website 96% of The Super Betwixt were aware of the ability to sacrifice their super eight in ten were aware of the ability to top up insurance 73% were aware that insurance is automatically included 83% of this segment were aware that they are able to make contributions electronically Behaviour The Super Betwixt segment were more involved than The Super Disinterested and were overall more likely to perform activities relating to their fund: three quarters read their super fund newsletter in the past 12 months half of The Super Betwixt have seen a financial advisor regarding super one in five have consulted a financial advisor in the past 12 months 92% checked their super fund balance less than one third of The Super Betwixt made additional contributions into their super nine in ten reviewed their member statement only 5% attended an education seminar 8% actively changed their investment choice one in ten actively selected a different fund from their default fund 16% provided or updated beneficiaries three in ten updated address/contact details 7% consolidated their funds The Super Betwixt are unlikely to consider starting up a self managed fund Perceptions The Super Betwixt perceive super to be of relative importance however do not have high confidence in their fund balance: super is relatively important to them now 4% feel they have a low balance and may be running out of time to build it up The Super Betwixt are relatively confident that they are on track to financially achieve the retirement they would like The Super Betwixt perceive super to be relatively important to their retirement (4.4 out of five) 18

21 Key Findings The Super Controlled comprising 3.7% of the population Characteristics The most prominent characteristics of The Super Controlled, although not exclusive, include: more likely to be older males, have a higher fund balance (more likely to have a super balance of $2,1 to $4,) and work full time. The Super Controlled were more likely to be aware of what was available, be more involved and also more confident with their fund balance. 44% aged 56 to 65 more likely to have a super balance of $2,1 to $4, 25% have a personal income of $4,1 to $6, The Super Controlled are predominantly males two thirds are full-time employees Awareness The Super Controlled segment have a high level of awareness of what is offered and available: 94% were aware that they are able to attend an education seminar all of The Super Controlled were aware that financial planning services were available 92% were aware they are able to change investment choice eight in ten were aware the Government is proposing to increase the SG rate the majority of The Super Controlled were aware of the % contribution paid by their employer eight in ten were aware calculators were available on the fund website a high proportion were aware of the ability to sacrifice their super seven in ten of The Super Controlled were aware that insurance was automatically included 92% were aware of co-contributions six in ten were aware of the ability to top up insurance 87% were aware that they were able to make contributions electronically Behaviour This segment had more involvement and performed more activities evidenced by the fact 99% checked their super fund balance: 92% read their super fund newsletter in the past 12 months half of The Super Controlled have seen a financial advisor/planner through their fund half of this segment have consulted a financial advisor/planner in the past 12 months 99% checked their super fund balance one third attended an education seminar 57% made additional contributions into their super 95% reviewed their member statement one third actively changed their investment choice half of The Super Controlled were certain not to change funds if they changed jobs three quarters provided or updated beneficiaries two in ten updated their address/contact details 6% actively selected a different fund from their default fund 16% consolidated their funds The Super Controlled were more likely than other segments to consider starting up a self managed fund Perceptions The Super Controlled rated super to be of highest importance in comparison to the other segments and were most comfortable with their super situation: super is relatively important to them now three quarters feel they have a good balance and were comfortable with how they were going relatively confident that they are on track to financially achieve the retirement they would like The Super Controlled perceive super to be of high importance to their retirement 19

22 Engagement at different life stages Matrix of what member engagement looks like at different life stages more likely than other respondents to be studying; highest proportion of this segment employed full time least likely to suggest they would be certain not to change funds if changing jobs low awareness of what was available to them through their fund most likely to have updated their address/contact details least likely to have checked their super fund balance or reviewed their member statement more likely than other segments to suggest the reason they have not performed activities is because they are not interested in super at this stage most likely segment to suggest that user friendly options, easy to understand simplified processes, and layman s terms would encourage them to be more involved most likely to have never seen a financial advisor/ planner regarding super least likely segment to perceive super to be important to them now most likely segment to indicate super is less important than investing in property and personal savings in a bank account or term deposit are just starting out or feel they have a low balance but have enough time to build it up high proportion of this segment have a personal income of under $2,, also $41, to $6, super fund balance is most likely to be under $2, most likely segment to indicate that they either currently live at home with their parents or live with their partner (and have no children) more likely than other respondents to mention that home duties described their employment status; characterised predominantly by full-time workers compared to older segments, less likely to suggest certain not to change funds if changing jobs in general lower awareness of what is available/ offered compared to older age segments least likely to suggest the government was proposing to increase the SG rate to 12% less likely than older segments to have performed activities, least likely segment to have provided or updated beneficiaries and read their super fund magazine most likely segment to have consolidated their funds more likely than older segments to have never seen a financial planner regarding super less likely than older segments to indicate super is important to them now perceive super to be less important than personal savings most likely to see their super situation as: have a low balance but have enough time to build it up generally live with their partner and have none, one or more children at home more likely than other segments to have a personal income of $8,1 to $1,, also characterised by respondents with a personal income between $4,1 and $8, most likely to have a super fund balance between $21, and $6, 2

23 Key Findings less likely than older segments to indicate they would be certain not to change jobs if changing funds compared to other segments, awareness was at average levels less likely than older segments to have checked their super fund balance, made additional contributions or consulted a financial planner regarding super most likely segment to suggest the reason for not performing activities was because they haven t bothered and keep putting it off compared to other segments the perceived importance of super was at average levels characterised by respondents who feel they have a low balance and feel they may be running out of time to build it up least likely segment to be confident they are on track to financially achieve the retirement they would like most likely to be characterised by those who live at home with their partner and have one or more children at home most likely segment to have a personal income of $8,1 to $1, more likely than other segments to have a balance of $61, to $1,; also characterised by those with a balance under $6, compared to other segments, least likely segment to belong to only one super fund, the majority of respondents in this segment have one or two funds in general, more likely to be aware of what is offered/available compared to younger segments however less likely to be aware in comparison to older segments more likely than younger segments to have checked their fund balance, made additional contributions, reviewed their statement or read their fund magazine (not as likely as older respondents) least likely segment to have updated their address/contact details more likely than younger segments to have seen a financial adviser super is more important to them now compared to younger segments; not as important as it is in older segments super is more important to them than personal savings characterised by respondents who have a low balance and feel they may be running out of time to build it up, and those who have a good account balance are comfortable. The most likely segment to feel they may be running out of time. more likely to live with their partner and have one or more children at home varied super fund balances within this segment 21

24 Life stage matrix continued characterised predominantly by full-time employees however in comparison to younger segments more likely to be employed part time more likely than other segments to have a self managed fund more likely than younger segments to be certain not to change funds if changing jobs overall high awareness of what is offered and available to them high awareness of co-contributions and % contribution paid by their employer more likely than younger segments to have checked their balance, provided or updated beneficiaries, made additional contributions, changed investment choice, consulted a financial planner, reviewed their statement, attended a seminar and read their fund magazine most likely segment to suggest they hadn t performed some activities because they were happy with everything set up most likely segment to have checked their balance more than five times most likely segment to mention nothing and I m already interested and involved as much as I want/need to be more likely than younger respondents to have seen a financial planner perceive super to be of high importance to them now super is more important than all other financial factors relatively even mix of respondents who perceive they have a low balance and feel they may be running out of time to build it up, and those who have a good account balance and are comfortable. More likely than other segments to have a fund balance of $21, to $4, more confident than younger segments they are on track to finance their desired retirement likely to live with their partner but children have left home most likely to work part time most likely segment to indicate they were certain not to change funds if changing jobs high relative awareness of what is available/ offered the segment most likely to be aware of co-contributions, the % contribution paid by their employer and that the government is proposing to increase the SG rate highest level of interaction among this segment, most likely to have performed activities relating to their fund super is most important to this segment now mix of respondents who have a low balance and feel they may be running out of time to build it up, and those who have a good account balance and are comfortable with how they are going higher level of confidence that they are on track to achieve the retirement they would like compared to younger segments characterised predominantly by those who live with their partner but children have left home varied super fund balances ranging from under $2, to over $2 million Over 75 most likely to be retired and no longer accumulating super this was the smallest segment as the majority over 75 were screened out due to being retirees. The sample size was too small to conduct statistical analysis 22