Befefits of Flow

An experience upgrade for fund members and trustees

Improved Member Incomes

The success of our approach is measured at the member level by the improvement in income that each member is expected to receive at retirement. Since inception of our goals-based investment approach, members of funds that employ this approach as the default, are expected to receive more income in retirement because of the investment strategy implemented.

The graph below shows that 99% of members for a sample fund have improved their expected incomes as a result of the strategy being adopted. This occurred in a period where equity/growth markets were under pressure. As a result of the shift in focus on incomes (as opposed to investment returns), anxiety amongst members around market performance reduced dramatically relative to previous experience (during similar markets).

99% of members for a sample fund have improved their expected incomes as a result of the strategy being adopted.

We also attributes the changes in income to changes in contributions and fund performance relative to what was required. This helps the Fund assess the success of any campaigns it may have run – for example, the BPOPF may choose to run a campaign to increase savings rate.

Improved Member Engagement

We have seen significant improvements in levels of member engagement, which in turn has led to the Funds that employ such an approach to continue to run further campaigns and member programs to enhance member education, awareness and financial health:

Fund have made available supplemental tools to members to understand the impact of other benefits, which are funded from contributions that could otherwise be directed towards retirement provision. For example, a tool has been made available that helps members quantify the trade-offs of various contribution options and risk benefit packages (as risk costs are funded first from contributions with the balance going towards retirement provision).
The Funds who have implemented this approach hosted a webinar for members following the adoption of the approach and host annual webinars following the distribution of member statements.  Pleasingly, the webinars have been extremely well attended (attendance levels in excess of 60%, compared to less than 10% of members attending before this approach was implemented).  

A recent study conducted in January 2019 by CEPAR, the ARC Centre of Excellence in Population Ageing Research, examined the impact that income projections had on the level of contributions, investment choices and engagement amongst members in an Australian super annuitisation Fund. The study found that members who received information about their expected incomes saved more, made more informed investment choices and engaged more with their retirement provision, therefore concluding that the new income projection information had the potential to substantially improve retirement outcomes. More information can be found at

Improved Member Behaviour

Perhaps most importantly, the key benefit we have seen in Funds that have implemented this approach has been the improvements in member behaviour – most notably, members increasing contributions rates, joining additional Funds within the organisation and/or increasing their pensionable salary percentages (following campaigns that have been run by the Funds as mentioned above).

To quote from the CEPAR study mentioned above, providing income projections improved member behaviour as members saved more, made more informed investment choices and engaged their retirement provision more. The study compared a group of 15 273 members who received income projections against another group (of the same size) that continued to only receive information about their accumulated savings.

The study measured results over a period of just more than a year.
The group that received income projections had more members that increased their contributions (33% more members increased their contribution rates) and had higher levels of savings (both on  a permanent basis, as members saved 32% more, on average, by increasing their contribution rates and on a temporary basis, as members saved 35% more, on average, through voluntary contributions).
Levels of member engagement amongst the group that received income projections improved - 46% more members engaged with the Fund and had multiple interactions with the Fund.

Improved Member Outcomes

As a result, more members are on track to achieve their income goals since this approach was adopted. The graph below shows the improvement in the number of members that are on track to meet their retirement income goals since adopting this approach:

Enabling better-informed decisions for Trustees

The framework brings together a number of key aspects – the annuity being targeted at retirement, the benefit targeted for each year of service, the investment strategies made available, the assumptions used, member behaviour, and importantly, gives the Trustees a sense of the financial health of the Fund. It also allows the Fund to assess the financial impact of a change to any of the above.

One of the Funds who have implemented this approach, asked us to do an analysis of the impact of changing the Fund’s default annuity and/or targeting a higher benefit for a less expensive annuity. With insight into the financial impact of these alternatives, the Fund was able to make an informed decision of what was most suitable for their members. Importantly, the decisions were informed by how they impact members’ incomes, arguably what counts the most.

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