Australia’s major super funds have seen their new member growth rates fall to an all time low of just 1.7% in 2009/10, some five years after most Australians were given choice about where to place their super. This is less than 30% of the growth rate of 6.1% enjoyed by funds before choice was introduced in July 2005 and for the first time ever is lower than the growth in the available labour force, meaning that in real terms, super fund membership is going backwards.
So, whilst Australians appear to have got the message that multipleaccounts are of no benefit to them, and as a result are minimising their fees by taking super from job to job, super funds are the ones now hurting and are set to spend, more than ever, in an attempt to both retain existing members and just as importantly find new members. The stress on funds is reinforced by the ever increasing recent merger fund merger discussions, including yesterday’s biggest ever super fund
merger announcement between Health Super and First State Super.
Managing Director of SuperRatings, Jeff Bresnahan commented on the trend “New membership growth stalled at around 5% after the introduction of choice in 2005, but in the last two years we have seen it plummet to a third of that rate. Further, we expect growth will go to zero over the next two years as Australians increasingly come to grips with their super and continue to see it as portable from job to job.
The full report can be found at SuperRatings