This report has been commissioned by Industry Super Australia (ISA) to assist it in responding to the Productivity Commission’s (PC) three stage review into the efficiency of the Australian Superannuation system. The purpose of this report is to examine switching trends of superannuation members. We examine whether switching activity is consistent with members making informed decisions which will improve their retirement outcomes.
In this report, we examine trends in member rollover and switching behaviour both in relation to the number of members and the size of benefits (assets) transferred. Specifically, we address:
▪ Demographic trends in member rollover and switching behaviour.
▪ Whether member switches provide improved outcomes, namely:
- lower fees following the change
- improving the likelihood of improved investment returns based on historical investment performance (net returns).
▪ Switching rates from employer sub-plans to personal superannuation.
▪ Cumulative probability of member exit over three years.