In its latest Pension Benchmark Report, researcher SuperRatings found superannuation membership declined by 1.4 per cent on a 'whole of fund' basis.
Most of this decline was driven by account transfers to the Australian Taxation Office and account consolidation between funds, said the report.
However, when the report narrowed in on the pension divisions of superannuation funds, membership grew by 16.8 per cent.
The pension divisions of superannuation funds also performed better than the industry as a whole when it came to net asset growth.
"Whilst whole of fund net assets grew by 16 per cent driven by strong investment returns over the 2013 year, this was also eclipsed by FUM growth in the pension phase which reached 26 per cent for the year," said the report.
SuperRatings' executive manager for consulting, Wendy Tse, said superannuation funds are rapidly recognising the importance of "retaining" members when they hit the pension phase of their life.
“Given the median account balance for pension members is more than four times the whole of fund median, there is no doubt funds are recognising it is imperative to retain an existing member into pension phase," Ms Tse said.
Part of the battle for funds is to improve member awareness about the retirement products that the fund has on offer, said the SuperRatings report.
SuperRatings has developed a 'utilisation rate' score that ascertains what percentage of members who may be eligible for an account-based pension have actually commenced a pension product.
Retail funds fared much better on this front, with a utilisation rate of 49.6 per cent. Not-for-profit funds, on the other hand, are only managing to convert 28.4 per cent of their eligible members to pension products.
"Funds that have had great success in pension FUM utilisation have seen rates upwards of 70 per cent in respect of this metric, supporting their investment in pension products and member engagement tools," SuperRatings said.
SuperRatings chief executive Adam Gee said funds that have invested heavily in their advice strategies, member segmentation and communications techniques are best placed to grow their pension membership.
Strongly differentiated pension investment options are also vital, he said.
"Funds that have yet to invest need to consider their membership base and how they are educating their members in relation to retirement solutions in advance of members retiring," Mr Gee said.
"If they do not do this, they risk losing large balances to other funds, despite it not being in the member's best interest in some cases."
