Retirement fund survey: members want better – and different - communication

Members of South African retirement funds want more effective communication. They say there are gaps between what they want and what they are receiving from their retirement funds, in terms of both the type of communication they receive and the way in whi

This was a key take-out from the 2013 Old Mutual Retirement Monitor released recently.

According to Karabo Morule, GM of Member Solutions at Old Mutual Corporate, 39% of respondents indicated that they would like one-on-one or face-to-face communication with their funds. Yet it remains the least offered form of communication by retirement funds, with only 6% of respondents actually receiving this kind of personal attention.

What’s more, although only 60% of respondents would like paper-based communication such as printed material or letters, this is what the vast majority (86%) are receiving from their funds.

“There is a clear disconnect between retirement funds and their members. It’s evident members want a more personal connection with their retirement fund and they are not content with the communication they are currently receiving. Funds need to consider how to become more member-centric and attuned to the specific needs of their membership. Addressing this gap in fund communication should become a priority for retirement funds,” she says.

Benefit statements remain one of the most used forms of fund communication, but receipt reduces in line with respondent income. “While 94% of members earning R40 000+ say they receive benefit statements, this figure drops to 61% among members earning less than R3000,” Morule says.

Furthermore, among respondents who say they receive benefit statements, the extent to which they read these statements differs according to income and, to a lesser extent, age. Only 32% of those earning less than R3 000 say they “always read it” compared to 66% of those earning R40 000+.

“It is crucial to encourage members to become more engaged with their benefit statements, regardless of whether they are 10 years away from retirement or 25 years. Members need to become more informed as the survey also revealed alarming gaps in members’ knowledge of the current state of their retirement savings,” says Morule.

Members were asked how well informed they are on certain aspects of their retirement fund, taking into account not only the information they get from their fund, but also information from other sources.

“Alarmingly, 52% of respondents said they were either not informed at all or poorly informed about their retirement needs versus what they have saved. 52% of respondents also indicated that they were either not informed at all or poorly informed about what to do with their savings when they retire,” says Morule.

A majority (55%) of respondents indicated they are either not informed at all or poorly informed about the underlying investments in their retirement funds.

“Members are lacking the crucial information they need to make informed and sustainable financial decisions not only during the savings phase of their lives but also on and in retirement. Funds urgently need to provide more relevant support for members during all stages of retirement saving,” says Morule.

The full results are available online at www.oldmutual.co.za/retirementmonitor