The choice of super fund policy has not solved the problem of consumer disengagement, according to new research by the Australia Institute and Industry Super Network. 

The report revealed that less than four per cent of workers were switching super funds each year.

Nearly half of the switches being made were due to job change or fund closure rather than active choice.

The report also showed that since the introduction of choice of fund in 2005, the number of multiple accounts had not decreased as was anticipated.

According to co-author and Australia Institute research fellow, Josh Fear, the majority of Australians have not benefited from greater choice and competition in the superannuation sector.

"Choice of fund has benefited the financial services industry and highly-engaged consumers, but has failed to adequately protect those who take a less active interest in their superannuation affairs," he said.

The report showed the needs of disengaged consumers, such as those with low super balances or who are a long way from retirement, were not being adequately addressed through the current super system.

"Average fees levied by super fund managers have not fallen and significant fee and performance variations persist between not-for-profit funds and retail funds," Fear said.

The report recommended that employer-nominated default funds should be required to meet certain standards to protect workers and ease the burden on employers.

"People should still have choice, but at the moment the disengaged are having their savings eroded through fees and charges," Fear said.

The report is based on 1002 respondents to an online survey that was representative of all Australian adults.