Abstract
Australia superannuation industry is an essential part of the three pillar retirement income policy with the first two pillars comprising of mandatory contributions and voluntary contributions. The contributors to superannuation schemes have significant control over their retirement assets with most having the choice of selecting a fund and their preferred investment option(s). However, many Australians remain disengaged from their superannuation plans and seem unaware of how their funds are performing. This study examined the best ways to present financial information to help young Australians make optimal decisions regarding their superannuation. Surveys were employed to present financial information on superannuation using four different models, experimenting with the display of fee, risk and return information. The overall results of the study highlight a number of interesting findings. First, where fee information was displayed affected fund selection as well as the reason for choosing the fund. Second, risk labels such as "medium risk" or "high risk" seemed to be more commonly relied upon than risk expressed as years of negative returns (risk probabilities). Third, employers appeared to be highly influential in fund selection. Finally, age seemed not to influence the fund or investment option selection. These findings have implications for regulators, fund managers, employers and superannuation fund members.
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