Default super is damaging your future

Today’s Productivity Commission report has highlighted all sorts of issues with the super industry. But one stands out above the rest, an overriding apathy. Is this because choice isn’t a fundamental element of the system?

First a short story

I started Zuper because of one simple realisation, super is such a great idea, but it’s been badly executed. The poor execution of any great idea more often than not, kills the idea itself.

Superannuation right now feels like the ultimate apathy grudge match, members v funds, two sides trying as hard as possible to ignore each other.

No choice breaks super from day one

Choice might just be the problem that is easy to fix. The Producivity Commission has put forward a slightly tweaked version of what already exists, what if the lack of personal choice is the root cause?

The default system does two things; creates no curiosity which leads to little or no research and doesn’t endow people into their superannuation. This means that it remains as an intangible and invisible part of our lives. It allows people to push it into the future (discounting the future), people think they will deal with it later, but rarely do.

Because we miss this endowment, we don’t play an active role in our superannuation and therefore our future, it doesn’t get any attention of energy. Then we overlay the role that has been assumed by super funds, to be at arms reach and communicate once or twice a year, we have a complete disconnection from the idea, the execution and the core, our money and what it is doing.

So you haven’t made a choice of provider or product, have no real idea about what you have been signed up for and get a couple of bits of paper each year about things you don’t fully understand. A few years down the line, you have lost any connection and passion for something that is absolutely essential.

Choice might be the start of the cure

Life without default could be the future that super needs. Helping people to connect to and understand something fundamental while more importantly pushing super companies to be an intrinsic part of society.

Maybe a new charter:

  1. Everyone should choose their super fund.
  2. Fees and returns are very important, but super companies should be a much bigger help in people’s lives today and tomorrow.
  3. Everyone should choose what they invest in and support with their super.

This would change the role of superannuation funds, it will drive competition and push super funds to engage their customers, help them understand their products and take control of their money today and for the future.

Jon Holloway

Founder at Zuper, product guy. Snowboarder and wannabe futurist.

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