Protect your super

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The "Protect your super" legislation has brought in some of the biggest changes to super rules in recent years.

Anyone working in super is no doubt very familiar with these changes. Probably the most significant are the new rules around insurance and inactive accounts.

As of July 1, any accounts that have been inactive for longer than 16 months will no longer receive automatic insurance cover, and inactive accounts with balances of less than $6,000 will be transferred to the ATO (source, ATO).

Though it could potentially result in a loss of revenue from fees for funds, overall this is a good thing for members.

While it is a big challenge for funds, it's also an opportunity to engage with inactive members and convince them of why they should stay with your fund.

Once you win them back, and get them engaged, you can then promote other activities like registering online, reviewing investment options and contributing extra. Follow up emails and/or social advertising campaigns could be used to target members who have acted to stay with the fund while super is still at the front of their mind.

These are disengaged members

Inactive members are by definition not highly engaged with their fund. Anyone who works in marketing for a super fund knows the difficulty in getting and holding the attention of people, especially young people, when talking about super. Getting inactive members, who are often younger members, to read and act on communications is a big challenge.

There will be many younger members who will be better off without insurance but for some it could be vitally important to retain their cover, depending on the industry they are in. Either way, funds should make sure they are reaching these members with the relevant information so they can make a choice themselves, without having it made for them.

The key is to make things as easy as possible.

Online campaigns are more likely to reach younger members, and if done right make it much easier for members to digest information, then act on it.

Asking people to remember their member number is often a big barrier, and is likely to be even more so for inactive members. Personalised landing pages can be used to remove this barrier, by securely pre-populating member numbers from a personalised email or SMS. A simple form can then let the member easily opt-in to keep their insurance or stay with their fund, without them needing to enter their member number.

ASFA has recognised the difficulties in reaching inactive members and is launching a nation-wide campaign in June to help funds with this goal. The campaign will encourage people to look at and act on communications sent to them by funds on the PYS changes. So now is a perfect time for funds to communicate with their members on this subject.

Even a small percentage of inactive members opting in could have a big impact on funds’ bottom lines. 

Things to consider

When communicating to members about the insurance changes, funds should always keep members’ best interest at the forefront. Don’t use scare tactics or pressure members into opting in for insurance – they may be better off without it. Present the facts and the things they should consider when they review their insurance needs.

As well as being the best thing for the member, this open approach is more likely to build trust and create better long-term relationships with members.

Beyond the cut-off date

Currently inactive members will lose their insurance cover on July 1 if they haven’t opted in by then.

But the challenge and opportunity to reach inactive members doesn’t end there. Members will continue to lose their insurance and have their balances transferred to the ATO as they reach 16 months of inactivity after July 1.

Ongoing trigger campaigns will be an effective way to reach these members as they get close to becoming inactive. An email linking to a landing page could be automatically sent when a member gets within six months of being declared inactive.

Though they definitely do pose some challenges, funds should look at the PYS changes as a great opportunity to re-engage disinterested and disengaged members.

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