Russell Investments has launched a risk modelling service that helps superannuation funds understand how changes in member numbers, demographics and fee levels affect the fund over time.

The service, called the Russell Total Fund Evaluator, is especially suitable for calculating liquidity and cashflow levels under different scenarios.

"If you have a black swan event, this allows you to model it," Russell senior consultant Australasia Tony Miller said.

The service can also demonstrate the benefits or disadvantages of a merger between funds, help build a MySuper product and illustrate the impact of budgeting decisions.

Russell started developing the tool two years ago at the request of a client.

The greater emphasis on liquidity in the aftermath of the global financial crisis and the various regulatory reforms has seen more super funds asking for the service, Miller said.

The new service is particularly suited to industry and corporate super funds.

"Retail funds generally don't have much exposure to illiquids," Miller said.

After running several models for clients, Russell found the most significant determinant of future growth is the number of members for whom they receive superannuation guarantee contributions, rather than the level of voluntary contributions or retention of members.

Some funds had underestimated the impact of this on their future growth.

"One client really overestimated how big they would grow. That has an impact not only on investments, but also on their staffing levels and costs," Miller said.

In some cases, the modelling showed funds would turn cashflow negative rather than continuing to grow as the baby boomer generation moved to the de-accumulation phase.