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Putting Members Interests First – Annoyance or Member Engagement Opportunity?

It’s been quite the year for super funds. We’ve all felt the crunch industry wide as we’ve scrambled to meet the Protecting Your Super (PYS) requirements and deadlines. And now we’re looking down the barrel of the Putting Members Interests First (PMIF) reforms with the added burden of significant regulatory fatigue.

But does it have to be all panic and mayhem? Could we not flip the reform on its head and look at it as a significant member engagement opportunity? Here at Transform we enthusiastically say yes and here’s why.

Member Retention and Education Opportunities

PMIF presents us with a unique member retention campaign opportunity, as well as a significant member education piece that may have otherwise been skimmed over in the past. It gives us that much needed nudge to really think about the members impacted by the PMIF reform, look at how we communicate to them, with what messaging and through which channels.

Targeted Messaging

The under 25 cohort provides an opportunity to engage and educate a traditionally disengaged audience. The PMIF reform has a direct and immediate impact on them, unlike retirement, which is a lifetime away. It is our job to ensure we effectively reach and engage these members to drive the best member outcomes.

The same goes for the group with an account balance under $6,000, which will be most members on joining, unless they roll in funds. Another great chance to engage and educate them around insurance in super with relevant and targeted messaging, as well as position other relevant calls to action around the communications. Consolidation anyone?

Strategic Forward-Thinking

There’s also the need to look ahead strategically. Specifically around your new member onboarding journey and how you educate members about insurance in the post PMIF world come 1 April 2020. Super funds can build on their already established new member onboarding journey with additional segmented touch points, that incorporate targeted messages around insurance and supporting educational articles and/or videos. Or build a new member onboarding journey with the added PMIF complexities in mind – thinking about what differing messages go to which groups that ensures members are adequately educated and informed to make decisions that best suits their individual needs.

ASIC’s Expectations

ASIC has been doing their own work around PMIF and a recent ASIC media release and letter to trustees stresses their expectation of Funds to improve the standard of their communications to members about the reforms. The expectation being that communications be developed with the member’s best interests as the number one priority.

It’s a big piece of work and there’s a lot to consider, with a number of internal and external stakeholders to engage. Plus there’s more to the picture then what’s mentioned above, you’ll also need to implement PDS updates and Insurance Change SENs.

Based on our experience across a number of funds, we’ve done the groundwork developing a high-level Marketing and Communications Strategy for the PMIF reforms that takes into account the complexities of the compliance requirements. We believe a robust, yet flexible communications calendar is needed that includes a variety of tools and mediums to maximise reach and better engage and educate your members around PMIF and insurance in super. Your current new member onboarding program needs to be assessed and the new variations to the segmentation identified and their targeted communications developed and implemented. All while you action the required updates to your PDSs and the Insurance Change SENs.

The key communication focus across all of these elements being the requirement to provide members with the most balanced and factual communications, allowing them to make informed decisions that best suit their needs, while at the same time ensuring it’s engaging and educating.

10 ways to make your employee share plan work harder

Remuneration executives have long appreciated the value of employee share plans in driving improved business performance by creating a direct link between employee and company performance. That’s because when employees own shares, they think and act like owners.

As Andrew Porter, President of Group of 100, explains, “when an employee can directly see how improvements in the bottom line of a business can benefit them, they become more motivated – generally speaking – and the business improves.”

Research has shown employee share ownership can increase productivity by up to 5% when combined with employee engagement and involvement. But to drive engagement you need to build awareness, understanding and commitment – and that’s where employee communications come in.

Here are 10 ways to improve the effectiveness of your share plan communications:

1. Explain where your share plan fits into your company’s vision and strategy.
2. Reduce the complexity of your plan design, especially if your company is global.
3. Remove as much tax, legal and compliance jargon from your communications as you can.
4. Support employees with investor education – don’t assume they understand how shares work.
5. Update employees regularly on the plan, using a mix of tools and channels, from face to face to digital.
6. When the share price falls and rises, use it as a chance to talk with your employees.
7. Make your plan part of your value proposition to attract potential employees.
8. Ask executives to endorse the plan and equip managers with consistent messages about your plan.
9. Establish feedback loops to understand employee perceptions, misconceptions and information needs.
10. Create a culture where employees are advocates of the plan.

There are several advantages to giving your employee share plan a bigger role in your performance and rewards framework. For example, employee owners are more likely to:

• be an advocate for your organisation
• be loyal to its products and services
• participate in company decision making
• pay closer attention to financial targets, ongoing results and waste
• seek out issues and problems to improve and fix
• continue to reinvest in your company through the share plan over time.

Lifting engagement isn’t as easy as changing a logo and adding a tagline to your plan. If the plan is poorly designed in the first place, no amount of lipstick will make it more attractive.

Optimum results need effective plan design and effective employee communication to drive awareness, understanding – and ultimately – behaviour change.

So why not take a look at refreshing your share plan communication and engagement strategy – you might just be surprised by the number of lights it turns on right across your organisation.

How can super funds better meet senior members’ needs?

Increasingly funds are positioning themselves as a fund for life, offering members the ability to save for retirement and then to draw down on those savings as pension income in their post-work lives.

But how well are super funds catering to the needs of members in their post-work lives to ensure they truly are a fund for life? Here’s some of the trends we’re seeing that are set to shift how funds communicate with, and meet the needs of, their older members.

Retirement has retired

Retirement is now viewed as a ‘second act’ where personal growth, expansion, learning, socialising and contributing to the community are important in ensuring a happy (and long) retirement. It’s no longer just about recreation. The concept of retirement as ‘slowing down’ (and sometimes viewed as ‘retiring from life’) is dead.

So too is the idea of being in full-time work one day and retired the next. Now the journey into retirement might mean transitioning through part-time or contract work, a late in life career change, starting a business, volunteer work or taking up further study.

The new retirement changes what funds communicate, the methods of delivery and the supporting services they offer to members. Increasingly, there is emphasis on planning holistically, taking into account relationships, health and wellbeing, and finances. Retirees want a fulfilling and meaningful post-work life, not a permanent holiday.

Not one homogeneous group

Ageing members are incredibly diverse. Think about the needs and lifestyle of someone in their 60s compared to someone in their 90s. Then add in the complexity of personal circumstances. Someone in their 60s bringing up teenage children in a blended family with a mortgage and school fees has a completely different set of needs and interests to a debt free 60-year-old with adult children and grandkids.

The importance of segmentation and tailored, personalised communication is just as important in the post-work phase as in the accumulation phase. Member profiling and segmentation based on life stage and behaviours rather than physical age is important. And its importance is only going to grow given Australia’s ageing population.

Fear of outliving savings

One of the biggest fears of retirees is outliving their retirement savings. With rising lifespans, members can now look forward to up to 40 years in retirement. At the same time, more and more retirees are still paying off a mortgage, many are still supporting adult children, the divorce rate amongst retirees is increasing and many are forced to retire earlier than they would have hoped.

The role of property as a retirement asset is also undergoing generational change. Some lucky retirees own prime land or inner-city property and they’ve had strong capital growth since 1992 – giving them the choice of downsizing or leveraging that asset for retirement income purposes. Others are in a different position. Retirees who are renting, particularly in capital cities, face rent taking a large chunk out of their superannuation savings. Funds can assist members in addressing both a shortfall in savings and ensuring available funds last for as long as possible.

Age is about mindset, not physical age

The concept of ageing is being reinvented. Good health is viewed as something that can be maintained for longer and so, if you’re living a healthy lifestyle, age is more about mindset than physical age. Most 60s do not consider themselves old – it’s the new 40s and 70 is the new 60. Unfortunately, 80 is pretty much still 80 because of declining health but the point is retirees don’t see themselves as old until declining health plays its part. Leading funds recognise this by engaging members with lifestyle-based communications that talk to members’ interests rather than communications that are triggered primarily by regulatory change.

Three phases of ageing have different needs

Research suggests there are generally three post-work stages of life – an active phase, followed by a sedentary phase and then a dependency phase. The active phase is usually the early years of retirement, the sedentary phase is when health starts to decline, and the dependency phase involves a need for aged care or assisted living.

These phases don’t apply to all and vary in length across individuals, but research tells us that expenditure levels vary at each stage. This has implications for the products and services funds offer to members. Funds can assist members to prepare for and navigate each stage with flexible products and services that cater to changing circumstances.

Fresh ideas on reshaping services and communications

A fund for life means engaging with members, no matter what their life stage or circumstances. Leading super funds will be those that expand their focus from the accumulation phase and retention at retirement to identify the needs of their ageing members and delivering services and communication to match those needs.

Find communicating insurance a challenge?

These 5 insights will help you connect more effectively.

With Protecting Your Super and now Protecting Members’ Interests First, communicating insurance has been big for super funds in 2019. If you work in the super industry and find it challenging, you’re not alone. In a live poll at the 2019 August Group Insurance Summit, 44% rated communications above pricing, claims handling and services as their greatest challenge.

Here are 5 insights that will help you connect with your members more effectively.

1. Focus on what matters to members

Different demographics have different concerns. For younger members, insuring their ability to earn a living is likely to resonate more. Older members with financial commitments and a family have more to protect but may be struggling to work out how much and what kind of cover they need.

A 2017 MetLife survey of 1,500 working Australians found three key benefits had the greatest appeal to members:
• the tax advantages of premiums being paid from super
• lower costs resulting from bulk purchases of policies
• automatic acceptance without the need for a health check.

Yet these same benefits have low levels of awareness. The same survey found 56 percent were not aware of the tax benefits and 61 percent were not aware that insurance is bulk purchased as a group life policy. Some 52 percent were not aware that many super funds automatically accept people for insurance cover without requiring a health check.

You can instantly improve your communications by focusing on what matters to members – not what you think they should know or care about.

2. Dispel myths and misinformation

If you’re working in super you probably won’t be surprised by MetLife’s 2019 PMIF research finding that many younger members don’t know they have insurance in their super, let alone what type or how much they’re covered for. This reinforces the need to repeat the basics to generate awareness.

What may really surprise you, though, is that most think life insurers pay around 50 percent of claims when in fact APRA and ASIC statistics show 92 percent of finalised claims on insurance through super were paid in 2017.

Basic education around what cover is provided, what it’s good for, your fund’s claims payment history and how to make a claim can help bust myths and build trust. So too can using member stories to bring dry information to life and make it meaningful.

3. Show value for money

The same PMIF Metlife research indicates that if you ask members to estimate their cover and the cost, they’ll get it wildly wrong. Most grossly underestimate how much they’re insured for and over-estimate the fees. So give them the facts: what cover they have versus what they pay. Don’t rely on them getting details of their cover amounts and fees off an annual or twice yearly benefit statement – instead incorporate that information whenever it’s relevant. Even better, make it something they can relate to – for example, insurance cover for “the cost of a couple of cups of coffee”.

4. Use personalised content + multiple channels

Digital and data make it easier than ever to serve up content that’s tailored to your audience. Use those data insights to decide how best to segment your membership to make your messages relevant and reduce complexity.

Ways to segment include age, type of cover (default vs tailored), life stage, how long they’ve been with the fund and more. Personalised content makes it easier to simplify your message whereas a ‘one size fits all approach’ leaves you having to incorporate content for all kinds of cover variations. Anything that simplifies your message will improve understanding.

Providing information in more than one channel allows people to access information in a way that suits them and helps to build product literacy. Everything from your regular benefit statements to text messaging, emails, letters, your website and outbound calls can carry content about insurance. All those communications can include a call to action about contacting the fund for help deciding on the right level of cover, with reassurance the fund is there for them. MetLife research indicates 7 out of 10 members believe it’s the role of their super fund to assist them with insurance cover – don’t let them down.

5. Deliver the right message at the right time

Life changes such as getting married, having a baby, changing jobs or buying a house are all triggers for getting or increasing insurance cover. Big changes like this are opportunities for engaging members around their insurance cover. The challenge for super funds is to identify these trigger times. This is where data analytics comes in, based on indicators such as change of name, address change or beneficiaries being updated. Smart use of your member data and the insights it provides can lead to better outcomes – for your members and the fund.

We hope you find these insights helpful. If you’d like to find out more about how Transform Communications can help with your insurance communications contact our CEO and Director, Chris Dvoracek.

A fund for life?

Many superannuation funds see themselves as a fund for life. Much time and resources are spent on helping members to grow their super in the accumulation phase. Ageing memberships also mean more time and resources are now being spent on the retention of members at retirement.

But how well are super funds catering to the needs of members in their post-work lives to ensure they truly are a fund for life? What are the needs of ageing members and how can funds best engage with them?

Retirement has retired

Retirement is now viewed as a ‘second act’ where personal growth, expansion, learning, socialising, and contributing to the community are important in ensuring a happy (and long) retirement. It’s no longer just about recreation. The concept of retirement as ‘slowing down’ (and sometimes viewed as ‘retiring from life’) is dead. So, too, is the idea of being in full-time work one day and retired the next. Now, the journey into retirement might mean transitioning through part-time or contract work, a late in life career change, starting a business, volunteer work, or taking up further study.

This ‘new retirement’ changes what funds should communicate, the modes of delivery, and the supporting services they offer to members. Increasingly, there is emphasis on planning for retirement holistically, taking into account relationships, health and wellbeing, as well as finances. Retirees want a fulfilling and meaningful post-work life, not a perpetual holiday.

Not one homogeneous group

Super funds have historically viewed retired members as one homogeneous group, but ageing members are incredibly diverse. Think about the needs and lifestyle of someone in their 60s compared to someone in their 90s? Then add in the complexity of personal circumstances – someone in their 60s bringing up teenage children in a blended family with a mortgage and school fees has a completely different set of needs and interests to a debt free 60 year old with adult children and grandchildren.

The importance of segmentation and tailored, personalised communication is just as important in the post-work phase as in the accumulation phase. Member profiling and segmentation based on behaviours rather than physical age is important. And its importance is going to grow given the post-work cohort is getting bigger as our population continues to age.

Fear of outliving savings

One of the biggest fears of retirees is outliving their retirement savings. With rising lifespans, members can now look forward to up to 40 years in retirement. At the same time, more and more retirees are still paying off a mortgage, many are still supporting adult children, the divorce rate amongst retirees is increasing and many are forced to retire earlier than they would have hoped.

The role of property as a retirement asset is also undergoing generational change. Many of today’s retirees own prime land or inner-city property and they’ve had strong capital growth since 1992 – giving them the choice of downsizing or leveraging that asset for retirement income purposes.

The next generation of retirees will be in a different position. For them, housing is increasingly out of reach, which means they’ll need to rely on their super or other investments as the primary income for retirement, which may include paying rent.

Funds can assist members in addressing both a shortfall in savings and ensuring available funds last as long as possible.

Age is about mindset, not physical age

The concept of ageing is being reinvented. Good health is viewed as something that can be maintained for longer, and so, if you’re living a healthy lifestyle, age is more about mindset than physical age. Many people in their 60s do not consider themselves old (it’s the new 40s), and 70 is the new 60. Unfortunately, 80 is pretty much still 80 because of declining health, but the point is, retirees don’t see themselves as old until declining health plays its part. Leading funds recognise this by engaging members with lifestyle-based communications that talk to members’ interests, rather than communications that are triggered primarily by regulatory change.

Three phases of ageing have different needs

Research suggests there are generally three post-work stages of life – an active phase, followed by a sedentary phase, and then a dependency phase. The active phase is usually the early years of retirement, the sedentary phase is when health starts to decline, and the dependency phase involves a need for aged care or assisted living.

These phases don’t apply to all and vary in length across individuals, but research tells us that expenditure levels vary at each stage. This has implications for the products and services funds offer to members. Funds can assist members to prepare for and navigate each stage with flexible products and services that cater to changing circumstances.

Members want funds to play a role in aged care

Health care and aged care costs are increasing due to our ageing population. Greater pressure is being placed on the individual to fund their own health and aged care costs. A 2015 survey by CoreData, undertaken on behalf of ASFA, found that more than half of the respondents thought super funds should play a greater role in helping to organise and pay for aged care.

More than half of those surveyed over the age of 45 were currently dealing with, or had dealt with, aged care management issues for themselves or family members. The majority dealing with the aged care system found it difficult or somewhat difficult. There is considerable demand for super funds to provide education and advice on aged care, with 60 per cent of members likely or very likely to take those up.

Fresh ideas on reshaping services and communications

A fund for life means engaging with members, no matter what their life stage or circumstances. Weight of post-work numbers means super funds will increasingly be called on to cater to the needs of their ageing members. Leading super funds will remain competitive by moving beyond the traditional realms of accumulation and retention at retirement by understanding the needs of ageing members and delivering services and communication to match those needs.

Ideas to consider

Here are some ideas for reshaping services and communications aimed at your more senior members:

    Can aged care advice be incorporated into your comprehensive advisory services? What about tools and information that members can self-service?

    Audit your content, images and information channels aimed at retirees with a fresh eye. How well do they match with the lifestyles of members, their interests and needs?

    Put your retirement planning information to the test. Is it purely financially focused? All about regulatory change and not much else? Consider broadening to more of a holistic approach.

    Consider telling stories to win the current and future generation of retirees – facts are great, but stories capture hearts.

    Don’t ignore the power of personalised data projections provided in engaging ways. Why not tell members exactly what their chances are their super will last their lifetime – and what to do about it if they’re falling short?

    Consider retirement income solutions that provide the flexibility to match the changing
    expenditure patterns of post-work members at the different phases of ageing.
    Are you addressing each phase?

    Take a fresh look at what you are doing to meet the needs of retired members. A fund that does this well will truly be a fund for life.

Written by Ian Taylor, Principal Consultant and Chris Dvoracek, Director Transform for the October 2017 issue of Superfunds magazine

Get in touch

Phone +61 3 9532 8342
Email admin@transformcommunications.com.au
Mail PO Box 316 Elsternwick VIC 3185 Australia

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