WITH THE introduction of choice of superannuation fund on 1 July, the biggest hassle for employers will be an administrative one whereby super contributions are sent to the various super funds employees nominate, according to a superannuation research and advisory firm
WITH THE introduction of choice of superannuation fund on 1 July, the biggest hassle for employers will be an administrative one whereby super contributions are sent to the various super funds employees nominate, according to a superannuation research and advisory firm.
However, employers should not be fooled into thinking that they all have to send contributions to every super fund in the country, said Alex Dunnin, director of research for Rainmaker Information.
“Employers should put the pressure back on employees to say that, as an employer they will play ball and do all they reasonably can, but employees have to also play the game and choose funds that are administratively easy to deal with,” Dunnin said.
“So if a fund doesn’t accept EFT contributions, makes things difficult for employers or is generally a roadblock then you can say to the employee that you won’t send the contributions that way.”
This means employees will have to in many cases choose funds that are ‘public offer’ and that have good administration systems, he said.
Some super funds also appear to be unprepared for the introduction of super choice, after a recent survey found that more than 35 per cent of public offer super funds failed to address or gave only token attention to providing members with real-time processing facilities.
The provision of web-based services including real-time processing will become key differentiators in the choice of fund environment, according to Emery Feyzeny, superannuation services partner for KPMG, which conducted the survey.
“Member access to real-time functionality such as seeing current account balances and membership details updated instantaneously has improved marginally from last year, although overall this continues to be generally poor,” he said.
“While the government, industry bodies and the media have been concerned about whether members are prepared for fund choice, it is equally important to ask whether our super funds are ready.”
The survey also found that a high proportion of websites didn’t assist members in evaluating their investment risk tolerance (45 per cent) or include tools for members to assess their insurance requirements (62 per cent).
