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Member engagement key to getting right retirement outcomes: MetLife
The increasing focus on member engagement and education by super funds over the past 15 years is a positive development, helping members improve their retirement outcomes, says Meray El-Khoury, chief insurance officer for life insurer MetLife Australia.
“Previously, super was very accumulation and savings focused. Most members were in the default product,” she tells The Golden Times. “But now that the framework has changed and choice is front and centre, the focus of the conversation has shifted to engagement benefits and net benefits and communicating that to members.”
The Retirement Income Covenant has forced funds to focus on their members’ retirement strategies. But research by Metlife, and other organisations, highlights the amount of work that still needs to be done to educate members on an appropriate retirement strategy.
MetLife recently surveyed 1,036 respondents in the 40-60 age bracket and found that while 69 per cent of those surveyed said they were concerned about outliving their retirement savings, 51 per cent said they don’t have a retirement plan.
More than half (53 per cent) also said they were not confident that they were prepared financially for retirement.
“Consumers and Australians can access a multitude of products, and the products are so diverse and can meet a vast range of needs. It’s almost like you need to use different building blocks to get to the right outcome, and that outcome is unique for each individual,” El-Khoury says.
The three main building blocks are an allocated pension, a longevity style product and the age pension. If you use the first two of those blocks effectively it can improve your ability to access the government pension.
El-Khoury says that members concerned about longevity risk should ask their super fund about how they can create a retirement plan that incorporates an account-based pension, the government age pension and longevity products, and where they can find more resources and information.
Fortunately for super funds, the Metlife survey also highlights how trusted they are by members with 70 per cent of those surveyed saying they believe their fund will help them make informed decisions about their retirement savings.
Super funds are earning this trust through the increasing attention being paid to member needs across the spectrum of accumulation and now decumulation.
“You can see that through the investment in tools, services and member engagement strategies. Advice has become so important to all super funds, particularly as their members are ageing. Having a thoughtful and multi-pronged advice strategy, I’ve seen that really evolve within super funds.”
Although not all super funds have longevity products available for members yet, many do, and many others are working on it. Larger funds obviously have the resources in-house to be able to create their own products, but small funds may choose to partner with an insurer such as MetLife.
“Smaller funds [are] leaning on their insurance partners for our research and product design. Because we get access to a lot more information, we see a lot more where we are at than a smaller super fund might see.
“I don’t think anyone has it nailed just yet, but we’re all on a journey, and we’re all helping each other in the ecosystem.”
El-Khoury says that AI will be instrumental in helping funds tailor their education messages to individual members.
“How AI is being used is evolving. It’s being more impactful, and it’s really assisting us to be able to free up our people to focus on the more human centred part of what we do. We’re going to start seeing some experimentation [with AI], and it’s only just going to make us better at the right message for the right person at the right time.”
A passionate advocate for the sector, El-Khoury likes being the person that people come to at barbecues to ask for information on superannuation and she is optimistic the industry is on the right track when it comes to retirement outcomes.
“I just love that what I get to do every day is help people live their best lives. Be that through building up thoughtful engagement processes and education and then giving people the tools to take control of their own futures, so that when they get to that spending phase, they really know what they can do, and they have the control and confidence to do that.”
