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Plum helps lazy super savers

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By Victoria Young
  •  
2 minute read

Scheme swells workforce super contributions.

A Plum Financial Services program to help lazy savers put more into super is going gangbusters, according to its chief. MLC-owned Plum introduced the Escalator Program, based on behavioural finance principles, in September.

An Australian first, it automatically makes small annual increases in members' super contributions, up to a maximum of 15 per cent of earnings, including the superannuation guarantee.

Plum has discussed the program with almost half of its clients and 57 per cent have either rolled it out or plan to. Employers can either run it as an opt-in or opt-out scheme.

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"Escalator's going really well. We've got a number of employers who've put it in place. It's going gangbusters," Plum Financial Services managing director Mike Fitzsimmons told InvestorDaily.

"When we set up Plum in 1998 we had the view that we could change the saving behaviour of 100 per cent of our membership base. What we know now through our own experience and what behavioural finance research tells us in the US, if you can change the savings behaviour of 60 per cent, you're doing pretty well. The other 40 per cent  . . . the avoiders, you're not going to change them."

Plum is one of the largest workplace superannuation educators in Australia. Education and communication leads to members taking an interest in driving their superannuation and retirement outcome, Fitzsimmons said.

The average score in the Plum Super Fitness Survey, which gauges public understanding of super, has increased from 37 per cent in 2001, to 51 per cent in 2006.

"That is statistically significant. That is a fairly major shift in people's understanding of financial and superannuation matters," Fitzsimmons said.

Plum met with clients in Brisbane, Sydney and Melbourne to explain its member engagement campaign on the Government's simpler super changes.

Plum has more than $8 billion in assets for 82 clients and 125,000 members.

Plum helps lazy super savers
Scheme swells workforce super contributions.
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