Plum's Escalator Program continues to deliver
25 March 2008
Programs based on soft compulsion* concepts can be a real boon for members if
they are combined with member education and implemented properly, according to
Plum's Regional Manager Graeme Humphrys.
Speaking at the Conference of Major Superannuation Funds (CMSF) last week in
Brisbane, Mr Humphrys talked about the success of Plum's Escalator Program and
the positive feedback from both Plum's members and corporate clients.
'Plum's Escalator Program (see Escalator Program quick facts below) was first
launched in 2006 and was the first of its kind in Australia. Since then we have
implemented a number of variations of the program to our corporate clients,' Mr
Humphrys said.
'What makes our program so successful with both members and our corporate
clients is its flexibility and extensive education program.'
The Escalator Program can be modified to meet individual corporate client needs. It
can be offered on both an 'opt in' or 'opt out' basis, or a combination of these. Before
it is implemented Plum conducts an extensive education program ensuring all
members are aware of the program and how it works.
In addition, if a member changes their mind about participating once they are
enrolled in the program, they can always subsequently 'opt out' of it.
'We introduced Escalator as we recognised that according to the majority of industry
data available, most Australians do not have adequate super savings to meet their
retirement needs,' Mr Humphrys said.
'The aim of this program is to help our members have an adequate income in
retirement. This includes educating them so they are in a better position to make
decisions regarding their own situation and investments.
'The key to our Escalator Program is that it also helps that segment of the population
who are unlikely to take action to save for themselves1.
'At Plum, we would like to see other super providers follow suit and offer such a
program to their clients where possible. Industry bodies like the Association of
Superannuation Funds of Australia (ASFA) 2 are also calling on the government to
make offering such schemes compulsory for all employers. According to the 2007
IUS / SuperReview survey3, many Australians think that soft compulsion is a good
idea. 4'
 Read the full version of the story - Plum's Escalator Program continues to deliver (PDF 47kB)
*Soft compulsion refers to programs where members are automatically enrolled unless they take active
steps to remove themselves from the program.
1 According to Behavioural Finance concepts around 40% of the population are unlikely to take action to
save more, even when they know they should.
2 ASFA, ASFA pre-budget: let's lift private savings,
[www.superannuation.asn.au/default.aspx?ArticleID=1086}] 24 January 2008
3 Super Review Industry Demanding Change, June 2007, p 24.
4 The survey indicated that 84% of respondents thought 'soft compulsion' was a good idea (ie 'opt-out').
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