When accepting the award for SuperRatings' Pension Fund of the Year at last week's Conference of Major Superannuation Funds, Sunsuper chief executive Tony Lally said industry funds were not putting enough effort into the post-retirement market.
"Industry funds only have a 4 per cent share of the pension fund market, while we have a 20 per cent share of the overall superannuation industry. So industry funds have a lot of work to do in this area," Lally said.
Australian Institute of Superannuation Trustees chief executive Fiona Reynolds agrees.
"Funds do need to pay attention and develop more products in this area. There is a market for lifetime annuities and the limited products that we have are not very well priced," Reynolds says.
Compounding the issue is that currently the majority of superannuation assets are held by baby boomers, a group steadily creeping towards retirement.
A survey released by professional services firm Deloitte last week revealed that in 2008 nearly 47 per cent of all superannuation assets were held by baby boomers.
"Together with 12 per cent of the assets held by those born before 1942, this amounted to more than 59 per cent of all assets," the report said.
Accordingly, Sunsuper has made member retention after retirement a high priority.
"It's a big issue because not only do we want to keep our own members, but we want to attract members from other funds. Because we have a very good product, we think we could attract people at retirement," Lally says.
Other industry funds are also placing increasing emphasis on their members' post-retirement lives.
Asset Super introduced a pension product in 2000 and believes it is an important factor in retaining members.
"We saw it as an opportunity to continue to add value to our membership before they would get to the end of their accumulation and go elsewhere," Asset Super chief executive John Paul said.
AustralianSuper also launched its first pension product last year.
Not only is offering a solid pension fund program a good way to retain members, the Deloitte survey also revealed it could help industry funds to boost their market share.
"If industry funds can develop effective strategies to counter the transfer of their high account balance members, especially as they approach retirement, they may overtake the retail - personal business segment earlier," the report said.
